Attached files
| file | filename |
|---|---|
| EX-31.2 - EXHIBIT 31.2 - ASTA FUNDING INC | ex_169965.htm |
| EX-31.1 - EXHIBIT 31.1 - ASTA FUNDING INC | ex_169964.htm |
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, 2019
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: 001-35637
ASTA FUNDING, INC.
(Exact Name of Registrant as Specified in its Charter)
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Delaware |
22-3388607 |
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(State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
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210 Sylvan Avenue, Englewood Cliffs, NJ |
07632 (Zip Code) |
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(Address of Principal Executive Offices) |
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Registrant's telephone number, including area code: (201) 567-5648
Securities registered pursuant to Section 12(b) of the Exchange Act:
| Title of each class |
Trading Symbol |
Name of each exchange on which registered |
| Common Stock, par value $.01 per share |
ASFI |
NASDAQ Global Select Market |
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act
Yes ☐ No ☑
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 ☐ No ☑
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 ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
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Large Accelerated Filer ☐ |
Accelerated Filer ☐ |
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Non-Accelerated Filer ☑ |
Smaller reporting company ☑ |
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Emerging growth company ☐ |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑
The aggregate market value of voting and nonvoting common equity held by non-affiliates of the registrant was approximately $12,168,319 as of the last business day of the registrant’s most recently completed second fiscal quarter in 2019.
As of January 16, 2020, the registrant had 6,567,765 shares of Common Stock outstanding.
EXPLANATORY NOTE
On December 20, 2019, Asta Funding, Inc. (the “Company,” “we,” “us,” or “our”) filed its Annual Report on Form 10-K for the fiscal year ended September 30, 2019 (the “Original 10-K”). This Amendment No. 1 (the “Amendment”) amends Part III, Items 10 through 14 of the Original 10-K to include information previously omitted from the Original 10-K in reliance on General Instruction G(3) to Form 10-K. General Instruction G(3) to Form 10-K provides that registrants may incorporate by reference certain information from a definitive proxy statement which involves the election of directors if such definitive proxy statement is filed with the Securities and Exchange Commission (the “SEC”) within 120 days after the end of the fiscal year. The Company does not anticipate that its definitive proxy statement involving the election of directors will be filed before January 28, 2020 (i.e., within 120 days after the end of the Company’s 2019 fiscal year). Accordingly, Part III of the Original 10-K is hereby amended and restated as set forth below. The information included herein as required by Part III, Items 10 through 14 of Form 10-K is more limited than what is required to be included in the definitive proxy statement to be filed in connection with our annual meeting of shareholders.
In addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), new certifications by our principal executive officers and principal financial officer are filed as exhibits to this Amendment under Item 15 of Part IV hereof.
Except as stated herein, this Amendment does not reflect events occurring after the filing of the Original 10-K with the SEC on December 20, 2019, and no attempt has been made in this Amendment to modify or update other disclosures as presented in the Original 10-K.
FORM 10-K
TABLE OF CONTENTS
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Page |
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Item 10. |
1 |
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Item 11. |
3 |
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Item 12. |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
7 |
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Item 13. |
Certain Relationships and Related Transactions, and Director Independence |
8 |
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Item 14. |
8 |
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Item 15. |
9 |
PART III
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Item 10. |
Directors, Executive Officers and Corporate Governance. |
Board of Directors
The members of our Board of Directors as of January 27, 2020, positions and their respective ages on that date were:
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Name |
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Age |
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Position |
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Gary Stern |
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67 |
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Chairman, President and Chief Executive Officer |
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Timothy Bishop |
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69 |
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Director, Nominating and Corporate Governance Committee Chair, Audit Committee Member, and Compensation Committee Member |
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Michael Monteleone |
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62 |
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Director, Audit Committee Chair |
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Louis A. Piccolo |
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68 |
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Director |
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David Slackman |
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72 |
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Director, Compensation Committee Chair, Lead Independent Director, Audit Committee Member, and Nominating and Corporate Governance Committee Member |
The Business Experience and Qualifications of Each Director
We believe that our Board of Directors should be composed of individuals with sophistication and experience in many substantive areas that impact our business. We believe that experience, qualifications, or skills in the following areas are most important: experience in the distressed consumer credit industry; regulatory; accounting and finance; capital markets; strategic planning; human resources and development practices; and board practices of other corporations. We believe that all of the current members of our Board of Directors possess the professional and personal qualifications necessary for board service, and have highlighted particularly noteworthy attributes for each such member in the individual biographies below. The principal occupation and business experience, for at least the past five years, of each current director is as follows:
Gary Stern has been a director and the President and Chief Executive Officer of the Company since our inception in July 1994. Mr. Stern assumed the role of Chairman in January 2009. Mr. Stern had been Vice President, Secretary, Treasurer and a director of Asta Group, a holding company and current affiliate of the Company, since 1980, and has held other positions with Asta Group prior thereto. In such capacities, he has obtained substantial experience in distressed consumer credit analysis and receivables collections. As a result of these and other professional experiences, Mr. Stern possesses particular knowledge and experience in financial management and collections, which strengthens the Board of Director’s collective qualifications, skills and experience.
Timothy Bishop has been a director of the Company since July 2018. Mr. Bishop served Southampton College for 29 years, leaving the position of Provost in 2002 to make his first-ever run for office, when he was elected to represent New York’s 1st Congressional District in one of the closest elections in the nation. He was re-elected to the House of Representatives five times. Congressman Bishop graduated from Southampton High School and holds a BA in History from Holy Cross College in Worcester, Massachusetts and a Masters Degree in Public Administration from Long Island University. During his time in Congress, Mr. Bishop served on the House Budget Committee for four years, and served as either the Vice-Chair or Co-Chair of the Democratic Budget group for all twelve years he was in Congress. Mr. Bishop previously served as a director of SFX Entertainment, Inc., a publicly traded media and entertainment company, during the period for which he served. Additionally, Mr. Bishop served as the budget officer for Southampton College for approximately 22 years. As a result of these and other professional experiences, Mr. Bishop possesses particular knowledge and experience in budget preparation, control and analysis, which strengthens the Board of Director’s collective qualifications, skills and experience.
Michael Monteleone has been a director of the Company since January 2019. Mr. Monteleone is a retired audit partner formerly with KPMG LLP, a global network of professional firms providing audit, tax and advisory services, where he served as an SEC Reviewing Partner from January 2010 to December 2018. Mr. Monteleone possesses particular knowledge and experience in audit and accounting matters, which strengthens the Board of Director’s collective qualifications, skills and experience.
Louis A. Piccolo has been a director of the Company since June 2004. Mr. Piccolo has served as President of A.L. Piccolo & Co., Inc., a business consulting firm specializing in management and financial consulting, since 1988. Mr. Piccolo was an Executive Vice President and Chief Financial Officer of Alfred Dunhill of London, Inc. from 1983 to 1988, and held the same positions at Debenham’s PLC, from 1981 to 1983. From 1977 to 1981, Mr. Piccolo was a senior accountant at KPMG Peat Marwick. As a result of these and other professional experiences, Mr. Piccolo possesses particular knowledge and experience in accounting and management, which strengthens the Board of Director’s collective qualifications, skills and experience.
David Slackman has been a director of the Company since May 2002. Mr. Slackman has served as Managing Director at HT Capital Advisors LLC from August 2008 to present. Mr. Slackman served as President, Manhattan Market (New York) of Commerce Bank from January 2001 through June 2008. Mr. Slackman was an Executive Vice President of Atlantic Bank of New York from 1994 to 2001 and a Senior Vice President of the Dime Savings Bank from 1986 to 1994. Since 2012, Mr. Slackman has served as Chairman of the New York City Advisory Board of Sterling National Bank. In 2015, Mr. Slackman was appointed President and Chief Executive Officer of the New York League of Independent Bankers until September 2016, a non-profit trade association for commercial banks in the New York metropolitan area. In October 2018, Mr. Slackman resigned his position at Sterling Bank to accept a consulting position with Republic Bank (FRBK), of Philadelphia, in connection with its expansion into New York City. As a result of these and other professional experiences, Mr. Slackman possesses particular knowledge and experience in financial services and management, which strengthens the Board of Director’s collective qualifications, skills and experience.
No director serves or has served in the prior five years as a director of another company with a class of securities registered pursuant to Section 12 or Section 15(d) of the Exchange Act or a company registered as an investment company under the Investment Company Act of 1940, aside from Mr. Bishop’s service as a director of SFX Entertainment, Inc. indicated above.
Our executive officers as of January 27, 2020, who are not directors of the Company, their positions and their respective ages on that date are:
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Name |
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Age |
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Position |
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Steven Leidenfrost |
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50 |
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Chief Financial Officer |
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Ricky Stern |
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35 |
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Senior Vice President and President of GAR |
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Seth Berman |
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57 |
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General Counsel and Chief Compliance Officer and Secretary |
Our executive officers serve at the discretion of the Board of Directors, subject to rights, if any, under contracts of employment.
Steven Leidenfrost, age 50, was appointed to serve as our Chief Financial Officer in September 2019. Mr. Leidenfrost has over 25 years of experience in banking and capital markets, management consulting and public accounting. Prior to joining Asta Funding, Inc., Mr. Leidenfrost was an Executive Director at Morgan Stanley, a global financial services firm, where he held a number of key leadership positions including Global Tax Controller, Head of Disclosure Policy and Strategic Projects and Head of SEC Reporting. Mr. Leidenfrost also was an auditor and consultant with KPMG LLP, an international public accounting firm. Mr. Leidenfrost is a Certified Public Accountant and serves on the SEC Committee at the New York State Society of Certified Public Accountants since July of 2009. Mr. Leidenfrost holds a Master of Business Administration in Financial Management and Information Systems from Pace University and a Bachelor of Science degree in Accounting from Manhattan College. Mr. Leidenfrost has no family relationship with any executive officer or member of the Board of Directors of the Company.
Ricky Stern, age 35, is considered an integral part of our executive management team as the President of GAR Disability Advocates, LLC, one of our wholly owned subsidiaries. Ricky was appointed Senior Vice President of the Company in March 2014. Prior to this appointment, Ricky served as our Assistant Treasurer from 2011 to 2014. Prior to joining the Company he was an analyst with a brokerage firm from 2008 to 2009. From 2009 to 2011 he earned his Master’s Degree. He is a Certified Financial Planner, Certified Investment Management Analyst, licensed health insurance producer in both New York and New Jersey and has attained the Accredited Disability Representative designation.
Seth Berman, Esq., age 57, has served as our General Counsel since 2005, was named Chief Compliance Officer in April 2013 and became Secretary of the Board of Directors in May 2016. From 1997 through 2004, Mr. Berman was associated with Weil, Gotshal & Manges LLP. Mr. Berman has no family relationship with any executive officer or member of the Board of Directors of the Company.
There are no events or legal proceedings material to an evaluation of the ability or integrity of any executive officer or director of the Company. Moreover, no executive officer or director of the Company is a party adverse to the Company or has a material interest adverse to the Company in any legal proceeding.
Family Relationships
Gary Stern is the father of Ricky Stern.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our directors and executive officers, and persons who own more than 10% of a registered class of our equity securities, to file with the SEC initial reports of ownership and reports of changes in ownership of common stock and other equity securities of Asta Funding, Inc. Officers, directors and greater than 10% stockholders are required by SEC regulation to furnish us with copies of all Section 16(a) forms they file.
To our knowledge, based solely on a review of the copies of such reports furnished to us and written representations that no other reports were required, during the fiscal year ended September 30, 2019 all Section 16(a) filing requirements applicable to our officers, directors and greater than 10% beneficial owners were filed in a timely manner.
Code of Business Conduct and Ethics
We have adopted a written code of ethics that applies to our directors, officers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Our Code of Ethics is available without charge upon written request directed to Asta Funding, Inc., Attn: Steven Leidenfrost, 210 Sylvan Avenue, Englewood Cliffs, New Jersey 07632. Additionally, our code of ethics is available on our website at https://www.astafunding.com. Any amendment to, or waiver of, a provision of our code of ethics that applies to our directors or executive officers will be disclosed on our website.
Changes in Governance and Nominating Committee Procedures
There have been no material changes to the procedures by which stockholders may recommend individuals for consideration by the Governance and Nominating Committee as potential nominees for director since such procedures were last described in our proxy statement, filed with the SEC on July 3, 2019.
Audit Committee
We have a separately-designated standing audit committee established in accordance with the Exchange Act. Our Audit Committee generally assists our Board of Directors in its oversight of our accounting, financial reporting and internal control functions. The Audit Committee currently consists of Mr. Monteleone, who serves as Chairman, Mr. Bishop and Mr. Slackman. As required by Nasdaq rules, the members of the Audit Committee each qualify as “independent” under special standards established for members of audit committees. To qualify as “independent” to serve on the Audit Committee, the Nasdaq rules and the applicable rules of the SEC require that a director does not accept any consulting, advisory, or other compensatory fee from us, other than for service as a director, or be an affiliated person of us. Our Board of Directors has concluded that the current composition of the Audit Committee meets the requirements for independence under the rules and regulations of Nasdaq and of the SEC. In accordance with SEC rules, the Audit Committee also includes at least one member who is determined by the Board of Directors to meet the qualifications of an “audit committee financial expert.” Mr. Monteleone and Mr. Slackman are the directors who have been determined by the Board of Directors to be the Audit Committee financial experts.
Director Independence
Nasdaq’s listing standards require that our Board of Directors consist of a majority of independent directors, subject to certain cure periods, as determined under the applicable Nasdaq listing standards. Our Board of Directors, consistent with the determination of its Nominating and Corporate Governance Committee, has determined that each of Mr. Monteleone, Mr. Bishop and Mr. Slackman qualify as independent directors. In addition, as further required by Nasdaq rules, the Board of Directors, consistent with the determination of its Nominating and Corporate Governance Committee, has made a subjective determination as to each independent director that no relationships exist which, in the opinion of the Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. In making these determinations, our directors reviewed and discussed information provided by our directors and us with regard to each director’s business and personal activities as they may relate to us and our management.
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Item 11. |
Executive Compensation |
Executive Compensation Table
We are currently considered a smaller reporting company for purposes of the SEC’s executive compensation disclosure rules. In accordance with such rules, we are required to provide a Summary Compensation Table (reporting two fiscal years of compensation) and an Outstanding Equity Awards at Fiscal Year-End Table, as well as limited narrative disclosures. Further, current reporting obligations extend only to our “Named Executive Officers” with respect to the 2019 year, which included Mr. Gary Stern, our President and Chief Executive Officer, and our two most highly compensated executive officers other than Mr. Gary Stern, Messrs. Ricky Stern and Seth Berman, who were serving as of September 30, 2019. Additionally, we are disclosing compensation information for Mr. Bruce Foster, who resigned as Chief Financial Officer of the Company effective September 22, 2019, in accordance with SEC rules, since disclosure of Mr. Foster’s compensation would have otherwise been required but for the fact that the he was not serving as an executive officer as of the end of the 2019 fiscal year.
Summary Compensation Table
The following table shows for the years ended September 30, 2019 and 2018 compensation awarded to or paid to our Named Executive Officers.
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Name and principal position |
Year |
Salary ($) |
Bonus ($) |
Stock Awards ($) |
Option Awards ($) |
Non-Equity Incentive Plan Compensation ($) |
All Other Compensation ($)(*) |
Total ($) |
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Gary Stern |
2019 |
$ | 600,000 | $ | - | $ | - | $ | - | $ | - | $ | 46,985 | $ | 646,985 | |||||||||||||||
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President and Chief Executive Officer |
2018 |
$ | 600,000 | $ | - | $ | - | $ | - | $ | - | $ | 40,390 | $ | 640,390 | |||||||||||||||
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Ricky Stern |
2019 |
$ | 291,538 | $ | 100,000 | $ | - | $ | - | $ | - | $ | 25,796 | $ | 417,334 | |||||||||||||||
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Senior Vice President and President of GAR Disability |
2018 |
$ | 280,000 | $ | - | $ | - | $ | - | $ | - | $ | 24,429 | $ | 304,429 | |||||||||||||||
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Bruce R. Foster(**) |
2019 |
$ | 275,000 | $ | 81,664 | $ | - | $ | - | $ | - | $ | 74,278 | $ | 430,942 | |||||||||||||||
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Chief Financial Officer |
2018 |
$ | 275,000 | $ | - | $ | - | $ | - | $ | - | $ | 39,666 | $ | 314,666 | |||||||||||||||
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Seth Berman |
2019 |
$ | 275,000 | $ | 20,000 | $ | - | $ | - | $ | - | $ | 42,594 | $ | 337,594 | |||||||||||||||
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General Counsel and Chief Compliance Officer and Secretary |
2018 |
$ | 275,000 | $ | - | $ | - | $ | - | $ | - | $ | 35,245 | $ | 310,245 | |||||||||||||||
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(**) Effective September 22, 2019, Mr. Foster resigned and was replaced by Mr. Leidenfrost as the Company’s Chief Financial Officer on September 23, 2019.
(*) See below table. |
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Name |
Year |
401(k) Company Match ($) |
Health Insurance Premiums ($)(1) |
Auto Fringe ($) |
Paid Vacation Time ($) |
Total ($) |
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Gary Stern |
2019 |
$ | 11,200 | $ | 31,171 | $ | 4,614 | $ | - | $ | 46,985 | |||||||||||
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Ricky Stern |
2019 |
$ | 12,154 | $ | 10,617 | $ | 3,025 | $ | - | $ | 25,796 | |||||||||||
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Bruce R. Foster |
2019 |
$ | 12,184 | $ | 31,171 | $ | 4,479 | $ | 26,444 | $ | 74,278 | |||||||||||
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Seth Berman |
2019 |
$ | 11,423 | $ | 31,171 | $ | - | $ | - | $ | 42,594 | |||||||||||
Narrative Following Summary Compensation Table
Total compensation paid to our Named Executive Officers is generally divided among three principal components: base salary, discretionary cash bonuses and equity awards. Base salary is generally fixed and does not vary based on our financial and other performance. In the case of stock options, the value is dependent upon our future stock price and, accordingly, such awards are intended to reward the Named Executive Officers for favorable Company-wide performance. Any cash bonuses are made at the Board of Director's discretion. Our Compensation Committee reviews total compensation to see if it falls in line with peer companies and may also look at overall market data. For fiscal year 2019, the Compensation Committee determined that our compensation program was generally competitive with the members of our peer group.
With respect to the 2019 year, we held base salaries consistent with 2018 levels for Messrs. Gary Stern, Seth Berman and Bruce R. Foster. We increased the annual base salary for Mr. Ricky Stern by $50,000, effective in June of 2019. The amount reflected in the “Salary” column in the Summary Compensation Table for Mr. Ricky Stern reflects the incremental amount he earned in fiscal year 2019 above his 2018 salary, once his mid-year salary increase took effect. We did not grant stock options or other equity-based compensation awards to our Named Executive Officers during the 2019 year, although all of our Named Executive Officers other than Mr. Foster held outstanding stock option awards as of the end of our 2019 fiscal year, as detailed below. Based on the Board of Director's subjective determination, each Named Executive Officer (other than Mr. Gary Stern) received a discretionary cash bonus in the amount set forth in the “Bonus” column in the Summary Compensation Table. These bonuses were paid in January of 2019 to Messrs. Ricky Stern and Seth Berman. Mr. Foster was paid bonuses of $50,000 in January of 2019 and $31,664 in April of 2019.
All Other Compensation
The Company maintains a 401(k) Retirement Plan covering all of its eligible employees. Matching contributions made by the Company are determined in the discretion of the Board of Directors each plan year. For the 2019 plan year, the Company matched 4% of the Named Executive Officers’ employee contributions to the 401(K) Retirement Plan, up to a maximum match of 4%. Additionally, the Company paid 100% of the health insurance premiums for the Named Executive Officers (and their eligible dependents) and an auto allowance for the Named Executive Officers (other than Mr. Seth Berman), each as shown in the Summary Compensation Table.
Severance and Change-in-Control Benefits
None of our Named Executive Officers are currently providing services under an employment agreement, and upon a termination by the Company, they would not receive severance benefits pursuant to any formal plan or program currently in place. Prior to his resignation, Mr. Foster was a party to an employment agreement with us. His employment agreement provided for severance benefits upon an involuntary termination by the Company. However, no severance benefits became payable to Mr. Foster in connection with his resignation from the Company.
Outstanding Option Awards at Fiscal Year-End
The following table provides information on exercisable options held by the Named Executive Officers on September 30, 2019. As of September 30, 2019 none of the Named Executive Officers held unvested stock option or stock awards.
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Option Awards |
Stock Awards |
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Name |
Number of Securities Underlying Unexercised Options (#) Exercisable |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested (#) |
Market Value of Shares or Units of Stock That Have Not Vested ($) |
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Gary Stern |
60,000 | - | $ | 7.63 |
12/15/20 |
- | - | ||||||||||||||
| 100,000 | - | $ | 7.77 |
12/13/21 |
- | - | |||||||||||||||
| 50,000 | - | $ | 8.49 |
12/12/23 |
- | - | |||||||||||||||
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Ricky Stern |
10,000 | - | $ | 8.36 |
12/22/21 |
- | - | ||||||||||||||
| 20,000 | - | $ | 9.57 |
12/18/22 |
- | - | |||||||||||||||
| 20,000 | - | $ | 8.49 |
12/12/23 |
- | - | |||||||||||||||
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Seth Berman |
30,000 | - | $ | 7.63 |
12/15/20 |
- | - | ||||||||||||||
| 30,000 | - | $ | 7.77 |
12/13/21 |
- | - | |||||||||||||||
| 20,000 | - | $ | 9.57 |
12/18/22 |
- | - | |||||||||||||||
| 20,000 | - | $ | 8.49 |
12/12/23 |
- | - | |||||||||||||||
Director Compensation
All compensation that Mr. Gary Stern received during fiscal year 2019 has been reported above in his employee capacity within the Summary Compensation Table. Mr. Gary Stern received no additional compensation for serving as a director, except that he, like all directors, is eligible to be reimbursed for any expenses incurred in attending Board and committee meetings. For fiscal year 2019, the total annual fees that a director, other than Mr. Gary Stern, could have received for serving on our Board of Directors and committees of the Board of Directors were set as follows:
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$45,000 for each member of the Board of Directors; |
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$15,000 for Chairman of the Audit Committee; |
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$10,000 for Audit Committee Members; |
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$15,000 for Chairman of the Compensation Committee; |
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$7,500 for Compensation Committee Members; |
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$15,000 for Chairman of the Nominating and Governance Committee; |
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$7,500 for Nominating and Governance Committee Members. |
The following table summarizes compensation paid to outside directors in fiscal 2019:
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Name |
Fees Earned or Paid in Cash ($) |
All Other Compensation ($)(1) |
Total ($) |
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Timothy Bishop (2) |
$ | 77,500 | $ | - | $ | 77,500 | ||||||
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Mark Levenfus (3) |
$ | 24,542 | $ | - | $ | 24,542 | ||||||
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Louis Piccolo (4) |
$ | 45,000 | $ | 3,750 | $ | 48,750 | ||||||
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David Slackman (5) |
$ | 77,500 | $ | - | $ | 77,500 | ||||||
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Michael Monteleone (3)(6) |
$ | 45,000 | $ | - | $ | 45,000 | ||||||
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(1) |
On August 15, 2019, the Company and Lou Piccolo entered into a new one-year, $30,000 contract, pursuant to which Mr. Piccolo will provide consulting services. Under this new contact, consulting service fees were $3,750 in fiscal 2019. The compensation is paid quarterly. There were no amounts due to Lou Piccolo at September 30, 2019. |
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(2) |
Mr. Bishop was appointed to the Board of Directors on July 19, 2018. Includes, in addition to $45,000 director retainer, $10,000 for being a member of the Audit Committee, $7,500 for being a member of the Compensation Committee, $15,000 for his fee as Chairman of the Nominating and Governance Committee, after Mr. Bishop assumed the role from Mr. Levenfus. |
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(3) |
Includes, in addition to $12,042 director retainer, $8,750 for being Chairman of the Audit Committee, $1,875 for being a member of the Compensation Committee, and $1,875 for being a member of the Nominating and Governance Committee of the Board of Directors, after Mr. Bishop assumed the role as Chairman. Mr. Levenfus resigned from the Board of Directors effective January 3, 2019. The Board of Directors appointed Mr. Monteleone as a director of the Company effective January 4, 2019, to fill the vacancy created by the resignation of Mr. Levenfus. |
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(4) |
Includes $45,000 director retainer. Mr. Piccolo had outstanding unexercised options to purchase 102,500 shares of common stock as of September 30, 2019. |
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(5) |
Includes, in addition to $45,000 director retainer, $15,000 for being Chairman of the Compensation Committee, $10,000 for being a member of the Audit Committee, and $7,500 for being a member of the Nominating and Governance Committee of the Board of Directors. Mr. Slackman had outstanding unexercised options to purchase 42,500 shares of common stock as of September 30, 2019. |
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(6) |
Includes, in addition to $33,750 for his prorated director retainer, $11,250 for his prorated fee for being Chairman of the Audit Committee of the Board of Directors. |
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Item 12. |
Security Ownership Of Certain Beneficial Owners and Management and Related Stockholder Matters |
The following table sets forth information as of January 16, 2020 with respect to beneficial ownership of our Common Stock by (i) each director and executive officer (including any person holding the position of CEO or CFO at any time during the fiscal year of 2019) (ii) each person known by us to own beneficially more than 5% of our outstanding Common Stock, and (iii) all directors and executive officers as a group. This table has been prepared based on 6,567,765 shares of Common Stock outstanding on January 16, 2020. Unless otherwise indicated, the address of each beneficial owner is c/o Asta Funding, Inc., 210 Sylvan Avenue, Englewood Cliffs, New Jersey 07632. All persons listed have sole voting and investment power with respect to their shares unless otherwise indicated.
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Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership |
Percentage(1) |
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GMS Family Investors LLC (2) |
871,500 | 13.3 |
% |
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Asta Group, Incorporated (3) |
842,000 | 12.8 |
% |
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RBF Capital, LLC (4) |
400,000 | 6.1 |
% |
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3047 Fillmore Street, San Francisco, CA 94123 |
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Officers and Directors: |
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Ricky Stern (5) |
2,530,750 | 38.2 |
% |
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Gary Stern (6) |
2,249,345 | 33.2 |
% |
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Louis A. Piccolo (7) |
110,500 | 1.7 |
% |
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Seth Berman (8) |
100,000 | 1.5 |
% |
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David Slackman (9) |
57,000 | 0.9 |
% |
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Michael Monteleone (10) |
- | - | ||||||
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Timothy H. Bishop |
- | - | ||||||
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Bruce R. Foster (11) |
- | - | ||||||
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Steven Leidenfrost (11) |
- | - | ||||||
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All executive officers and directors as a group (9 persons) (12) |
5,047,595 | 71.4 |
% |
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(1) Any shares of Common Stock that any person named above has the right to acquire within 60 days of January 16, 2020, are deemed to be outstanding for purposes of calculating the ownership percentage of such person, but are not deemed to be outstanding for purposes of calculating the beneficial ownership percentage of any other person not named in the table above.
(2) A limited liability company over which Ricky Stern has sole voting and investment power. Gary Stern has a 77.30% beneficial interest in the LLC, trusts for the benefit of the children of Gary Stern and of which Ricky Stern is the trustee has an 11.84% beneficial interest, and Emily Stern has a 10.78%, and Arthur Stern has a .08% beneficial interest in the LLC.
(3) Asta Group, Incorporated (“Asta Group”) is owned by Arthur Stern, our former Chairman Emeritus and Director, Gary Stern, our Chairman, President and Chief Executive Officer, and other members of the Stern family.
(4) Based on information received from the stockholder.
(5) Includes 50,000 shares of Common Stock issuable upon exercise of options. Includes 145,428 shares directly owned and 318,590 shares held in the Ricky Stern 2012 GST Trust for which he serves as co-trustee with Gary Stern, and has joint voting and investment power, and which are also reported as beneficially owned by Gary Stern. Includes 871,500 shares owned by GMS Family Investors LLC. Ricky Stern is the Manager of the LLC and as such has sole voting and investment power of such shares. Also includes 243,278 shares held in the Emily Stern Family 2012 Trust for which he is trustee, and has sole voting and investment power over such shares, and 714,364 shares held in the Ricky Stern Family 2012 Trust, for which he is trustee, and has sole voting and investment power over such shares. Also includes 187,590 shares held in the Emily Stern 2012 GST Trust for which he is co-trustee with Gary Stern, and which are also reported as beneficially owned by Gary Stern, and has joint voting and investment power over such shares.
(6) Includes 210,000 shares of Common Stock issuable upon exercise of options, 509,049 shares directly owned, and 842,000 shares of Common Stock owned by Asta Group, which shares are attributable to Gary Stern based on his role as an officer, director, and stockholder of Asta Group. Gary Stern disclaims beneficial ownership of the shares owned by Asta Group. Also includes 145,428 shares of Common Stock held by Mr. Stern’s adult child who shares his home, and for which he disclaims beneficial ownership, as well as 187,590 shares held in the Emily Stern 2012 GST Trust for which he is co-trustee with Ricky Stern, and which are also reported as beneficially owned by Ricky Stern, and has joint voting and investment power over such shares. Also includes 318,590 shares held in the Ricky Stern 2012 GST Trust for which he serves as co-trustee with Ricky Stern and has joint voting and investment power, and which are also reported as beneficially owned by Ricky Stern.
(7) Includes 102,500 shares of Common Stock issuable upon exercise of options within 60 days of January 16, 2020.
(8) Includes 100,000 shares of Common Stock issuable upon exercise of options within 60 days of January 16, 2020.
(9) Includes 42,500 shares of Common Stock issuable upon exercise of options within 60 days of January 16, 2020.
(10) Mr. Levenfus resigned from the Board of Directors effective January 3, 2019. The Board of Directors appointed Mr. Monteleone as a director of the Company effective January 4, 2019, to fill the vacancy created by the resignation of Mr. Levenfus.
(11) Effective September 22, 2019, Mr. Foster resigned and was replaced by Mr. Leidenfrost as the Company’s Chief Financial Officer on September 23, 2019.
(12) Includes 505,000 shares of Common Stock issuable upon exercise of options that are exercisable within 60 days of January 16, 2020.
Equity Compensation Plan Information
The following table gives information about our Common Stock that may be issued upon the exercise of options, warrants and rights under our 2012 Stock Option and Performance Award Plan, our Equity Compensation Plan and our 2002 Stock Option Plan, as of September 30, 2019.
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Plan Category |
(a) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights |
(b) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights |
(c) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities Reflected In Column(a)) |
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Equity Compensation Plans Approved by Stockholders |
722,567 | $ | 8.18 | 1,328,243 | ||||||||
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Equity Compensation Plans Not Approved by Stockholders |
- | - | - | |||||||||
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Total |
722,567 | $ | 8.18 | 1,328,343 | ||||||||
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Item 13. |
Certain Relationships and Related Transactions, and Director Independence. |
On August 15, 2019, the Company and Lou Piccolo, an non-independent member of the Company’s Board of Directors, entered into a new one-year, $30,000 contract, pursuant to which Piccolo will provide consulting services. The compensation is to be paid quarterly. There were no amounts due to Lou Piccolo at September 30, 2019.
For further information regarding the independence of our directors, please see the discussion under Item 10 below the heading “Director Independence,” which discussion is incorporated herein by reference.
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Item 14. |
Principal Accounting Fees and Services. |
EisnerAmper LLP (“EisnerAmper”) has served as the Company’s independent registered public accounting firm since April 2017. The fees billed by EisnerAmper for professional services rendered for the fiscal years ended September 30, 2019 and 2018, are reflected in the following table:
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2019 |
2018 |
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Audit Fees: |
$ | 567,000 | $ | 1,003,000 | ||||
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Audit-Related Fees: |
- | - | ||||||
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Tax Fees: |
- | - | ||||||
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All Other Fees: |
- | - | ||||||
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Total Fees: |
$ | 567,000 | $ | 1,003,000 | ||||
“Audit Fees” consisted of fees billed for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our Form 10-K and 10-Q or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
“Audit-Related Fees” consisted of fees billed for assurance and related services by the principal accountant that were reasonably related to the performance of the audit or review of our financial statements and are not reported under the paragraph captioned “Audit Fees” above.
“Tax Fees” consisted of fees billed for professional services rendered by the principal accountant for tax returns preparation.
“All Other Fees” consisted of fees billed for products and services provided by the principal accountant, other than the services reported above under other captions of this Item 14.
The Audit Committee pre-approves all audit and permissible non-audit services provided by its independent registered public accounting firm. All services described above were pre-approved by our Audit Committee.
Part IV
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Item 15. |
Exhibits, Financial Statement Schedules. |
(a) The following documents were filed or furnished as part of the Original 10-K:
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1. |
Financial Statements: The consolidated financial statements of Asta Funding, Inc. included in Part II, Item 8 of the Original 10-K |
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2. |
Financial Statement Schedules: All schedules have been omitted because they are not required, not applicable, not present in amounts sufficient to require submission of the schedule, or the required information is otherwise included. |
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3. |
Exhibits: The exhibits listed in Item 15(a) of the Original 10-K. |
(b) The exhibits listed in the Exhibit Index of this Amendment are being filed as part of this Amendment.
EXHIBIT INDEX
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Exhibit Number |
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2.1# |
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2.2 |
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2.3# |
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2.4# |
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3.1 |
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3.2 |
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3.3 |
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3.4 |
Exhibit 3.1 to Asta Funding, Inc.’s Current Report on Form 8-K filed on May 5, 2017. |
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3.5 |
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3.6 |
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3.7 |
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4.1 |
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10.1+ |
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10.2+ |
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10.3+ |
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10.4 |
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10.5 |
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10.6 |
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10.7 |
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10.8 |
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10.9 |
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10.10 |
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10.11 |
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10.12 |
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10.13 |
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10.14 |
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10.15 |
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10.16 |
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10.17 |
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10.18 |
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10.19+ |
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10.20 |
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10.21 |
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10.22 |
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10.23 |
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10.24 |
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10.25 |
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10.26 |
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10.27 |
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10.28 |
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10.29 |
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10.30 |
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10.31 |
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10.32 |
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10.33 |
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10.34 |
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10.35 |
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21.1* |
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23.1* |
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31.1*** |
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31.2*** |
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32.1**** |
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32.2**** |
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* |
Previously filed with the Original 10-K. |
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*** |
Filed herewith. |
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**** |
Previously furnished with the Original 10-K. |
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+ |
Indicates management contract or compensatory plan. |
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# |
Indicates schedules have been omitted pursuant to Item 6.01(b)(2) of Regulation S-K. Asta Funding Inc. agrees to furnish supplementally a copy of any omitted schedule or exhibit to the SEC upon request. |
SIGNATURES
Pursuant to the requirements of 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: |
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/s/ Gary Stern |
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Gary Stern |
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President and Chief Executive Officer |
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(Principal Executive Officer) |
Dated: January 27, 2020
Pursuant to the requirements of 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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Title |
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Date |
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/s/ Gary Stern |
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Chairman of the Board of Directors, |
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January 27, 2020 |
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Gary Stern |
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President, and Chief Executive Officer |
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/s/ Steven Leidenfrost |
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Chief Financial Officer |
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January 27, 2020 |
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Steven Leidenfrost |
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(Principal Financial Officer and Accounting Officer) |
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/s/ David Slackman |
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Director |
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January 27, 2020 |
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David Slackman |
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/s/ Louis A. Piccolo |
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Director |
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January 27, 2020 |
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Louis A. Piccolo |
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/s/ Michael Monteleone |
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Director |
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January 27, 2020 |
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Michael Monteleone |
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/s/ Timothy H. Bishop |
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Director |
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January 27, 2020 |
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Timothy H. Bishop |
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13