ASTA FUNDING, INC. (NASDAQ:ASFI) Files An 8-K Entry into a Material Definitive Agreement
Item1.01 Entry into a Material Definitive Agreement.
The information set forth under Item 3.03 Material Modification
to Rights of Security Holders of this Current Report on Form 8-K
with respect to the entry into a Rights Agreement (as described
below) is incorporated into this Item1.01 by reference.
Item3.03 Material Modification to Rights of Security
Holders.
On May 5, 2017, the Board of Directors (the Board) of Asta
Funding, Inc., a Delaware corporation (the Company),
declared a dividend of one right (a Right) for each of the
Companys issued and outstanding shares of common stock, $.01 par
value per share (Common Stock). The dividend will be paid
to the stockholders of record at the close of business on May 15,
2017 (the Record Date). Each Right entitles the registered
holder, subject to the terms of the Rights Agreement (as defined
below), to purchase from the Company one one-thousandth of a
share of the Companys Series A Junior Participating Preferred
Stock (the Preferred Stock) at a price of $28.60 (the
Purchase Price), subject to certain adjustments. The
description and terms of the Rights are set forth in the Rights
Agreement dated as of May 5, 2017 (the Rights
Agreement) between the Company and American Stock Transfer
Trust Company, LLC as Rights Agent (the Rights Agent).
The Rights will not be exercisable until the earlier to occur of
(i)the close of business on the 10th business day following a
public announcement or filing that a person has, or a group of
affiliated or associated persons or persons acting in concert
have, become an Acquiring Person, which is defined as a
person or group of affiliated or associated persons or persons
acting in concert who, at any time after the date of the Rights
Agreement, have acquired, or obtained the right to acquire,
beneficial ownership of 10% or more of the Companys outstanding
shares of Common Stock, subject to certain exceptions, or (ii)the
close of business on the 10th business day (or such other date as
may be determined by action of the Board prior to such time as
any person or group of affiliated or associated persons or
persons acting in concert become an Acquiring Person) after the
commencement of, or announcement of an intention to commence, a
tender offer or exchange offer the consummation of which would
result in any person becoming an Acquiring Person (the earlier of
such dates being called the Distribution Date). Certain
synthetic interests in securities created by derivative
positions, whether or not such interests are considered to be
ownership of the underlying Common Stock or are reportable for
purposes of Regulation 13D of the Securities Exchange Act of
1934, as amended, are treated as beneficial ownership of the
number of shares of Common Stock equivalent to the economic
exposure created by the derivative position, to the extent actual
shares of the Common Stock are directly or indirectly held by
counterparties to the derivatives contracts.
With respect to certificates representing shares of Common Stock
outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates for shares of
Common Stock registered in the names of the holders thereof, and
not by separate Right Certificates, as described further below.
With respect to book entry shares of Common Stock outstanding as
of the Record Date, until the Distribution Date, the Rights will
be evidenced by the balances indicated in the book entry account
system of the transfer agent for the Common Stock. Until the
earlier of the Distribution Date and the Expiration Date (as
defined below), the transfer of any shares of Common Stock
outstanding on the Record Date will also constitute the transfer
of the Rights associated with such shares of Common Stock. As
soon as practicable after the Distribution Date, separate
certificates evidencing the Rights (Right Certificates)
will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date, and such separate
Right Certificates alone will evidence the Rights.
The Rights, which are not exercisable until the Distribution
Date, may be exercised prior to the earliest to occur of (i)the
close of business on June 1, 2018, or such later date as may be
established by the Board as long as any such extension is
approved by a vote of the stockholders of the Company by June 1,
2018; (ii)the time at which the Rights are redeemed to the Rights
Agreement; (iii) the time at which the Rights are terminated upon
the closing of any merger or other acquisition transaction
involving the Company to a merger or other acquisition agreement
that has been approved by the Board prior to any person becoming
an Acquiring Person; and (iv) the time at which the Rights are
exchanged to the Rights Agreement (the earliest of (i), (ii),
(iii) and (iv)is referred to as the Expiration Date).
Each share of Preferred Stock will be entitled to receive, when,
as and if declared, a preferential per share quarterly dividend
payment equal to the greater of (i)$10.00 per share or (ii)1,000
times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions. Each share of
Preferred Stock will entitle the holder thereof to 1,000 votes on
all matters submitted to a vote of the stockholders of the
Company. In the event of any merger, consolidation or other
transaction in which shares of Common Stock are converted or
exchanged, each share of Preferred Stock will be entitled to
receive 1,000 times the amount received per one share of Common
Stock.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of
the Rights are subject to adjustment from time to time to prevent
dilution (i)in the event of a stock dividend on, or a
subdivision, combination or reclassification of the Preferred
Stock, (ii)upon the grant to holders of the Preferred Stock of
certain rights or warrants to subscribe for or purchase Preferred
Stock or convertible securities at less than the then-current
market price of the Preferred Stock, or (iii)upon the
distribution to holders of the Preferred Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends
or dividends payable in Preferred Stock) or of subscription
rights, options or warrants (other than those referred to above).
The number of outstanding Rights and the number of one
one-thousandths of a Preferred Stock issuable upon exercise of
each Right are also subject to adjustment in the event of a stock
split, stock dividend and other similar transactions.
In the event that, after a person or a group of affiliated or
associated persons or persons acting in concert have become an
Acquiring Person, the Company is acquired in a merger or other
business combination transaction, or 50% or more of the Companys
assets or earning power are sold, proper provision will be made
so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then-current exercise
price of the Right, that number of shares of common stock of the
acquiring company having a market value at the time of that
transaction equal to two times the Purchase Price.
With certain exceptions, no adjustment in the Purchase Price will
be required unless such adjustment would require an increase or
decrease of at least one percent (1%)in the Purchase Price. No
fractional shares of Preferred Stock will be issued (other than
fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts) and, in lieu
thereof, an adjustment in cash will be made based on the market
price of the Preferred Stock on the trading day immediately prior
to the date of exercise.
At any time after any person or group of affiliated or associated
persons or persons acting in concert become an Acquiring Person
and prior to the acquisition of beneficial ownership by such
Acquiring Person of 50% or more of the outstanding shares of
Common Stock, the Board, at its option, may exchange each Right
(other than Rights owned by such person or group of affiliated or
associated persons or persons acting in concert which will have
become void) in whole or in part, at an exchange ratio of one
share of Common Stock per outstanding Right (subject to
adjustment).
At any time before any person or group of affiliated or
associated persons or persons acting in concert become an
Acquiring Person, the Board may redeem the Rights in whole, but
not in part, at a price of $0.01 per Right
(subject to certain adjustments) (the Redemption Price).
The redemption of the Rights may be made effective at such time,
on such basis and with such conditions as the Board in its sole
discretion may establish.
Immediately upon the action of the Board electing to redeem or
exchange the Rights, the Company shall make announcement thereof,
and upon such election, the right to exercise the Rights will
terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
Until a Right is exercised or exchanged, the holder thereof, as
such, will have no rights as a stockholder of the Company,
including, without limitation, the right to vote or to receive
dividends.
The Board may amend or supplement the Rights Agreement without
the approval of any holders of Rights, including, without
limitation, in order to (a)cure any ambiguity, (b)correct
inconsistent provisions, (c)alter time period provisions or
(d)make additional changes to the Rights Agreement that the Board
deems necessary or desirable. However, from and after any person
or group of affiliated or associated persons or persons acting in
concert become an Acquiring Person, the Rights Agreement may not
be supplemented or amended in any manner that would adversely
affect the interests of the holders of Rights.
The Rights Agreement is attached hereto as Exhibit 4.1 and is
incorporated herein by reference. The description of the Rights
Agreement herein does not purport to be complete and is qualified
in its entirety by reference to Exhibit4.1.
Item5.03 Amendments to Articles of Incorporation or
Bylaws; Change in Fiscal Year.
Certificate of Elimination
In connection with the adoption of the Rights Agreement (the
Original Rights Agreement) dated as of August 23, 2012,
the Company filed a Certificate of Designations of SeriesA Junior
Participating Preferred Stock with the Secretary of State of the
State of Delaware setting forth the rights, powers and
preferences of the SeriesA Junior Participating Preferred Stock
(the SeriesA Preferred Shares) issuable upon exercise of
preferred share purchase rights (the Original Rights).
On May 5, 2017, the Company filed a Certificate of Elimination
(the Certificate of Elimination) with the Secretary of
State of the State of Delaware eliminating the SeriesA Preferred
Shares and returning them to authorized but undesignated shares
of the Companys preferred stock.
The Certificate of Elimination is attached hereto as Exhibit 3.1
and is incorporated herein by reference. The description of the
Certificate of Elimination herein does not purport to be complete
and is qualified in its entirety by Exhibit 3.1.
Certificate of Designation
In connection with the adoption of the Rights Agreement, the
Board approved a Certificate of Designations of Series A Junior
Participating Preferred Stock (the Certificate of
Designations). The Certificate of Designations is filed with
the Secretary of State of the State of Delaware. See the
description in Item 1.01 (which incorporates by reference Item
3.03) of this Current Report on Form 8-K for a more complete
description of the rights and preferences of the Preferred Stock.
The Certificate of Designations is attached hereto as Exhibit 3.2
and is incorporated herein by reference. The description of the
Certificate of Designations herein does not purport to be
complete and is qualified in its entirety by Exhibit 3.2.
Item9.01 Financial Statements and Exhibits.
(d) Exhibits.
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3.1
3.2 |
Certificate of Elimination of the Series A Junior
Certificate of Designations of Series A Junior |
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4.1 |
Rights Agreement dated as of May 5, 2017, between Asta |
About ASTA FUNDING, INC. (NASDAQ:ASFI)
Asta Funding, Inc. is primarily engaged in the businesses of acquiring, managing, servicing and recovering on portfolios of consumer receivables. The Company operates through four segments: Consumer Receivables, Personal Injury Claims, Structured Settlements and GAR Disability Advocates. The Consumer receivables segment is engaged in purchasing, managing for its own account and servicing distressed consumer receivables, including charged off receivables, semi-performing receivables and performing receivables. The Personal injury claims segment includes the operations of its subsidiary, Pegasus Funding, LLC. The Structured settlements segment includes the operations of CBC Settlement Funding, LLC (CBC). The GAR Disability Advocates segment includes the operations of GAR Disability Advocates, LLC (GAR Disability Advocates). GAR Disability Advocates is a social security benefit and disability advocacy group. ASTA FUNDING, INC. (NASDAQ:ASFI) Recent Trading Information
ASTA FUNDING, INC. (NASDAQ:ASFI) closed its last trading session up +0.65 at 7.35 with 41,204 shares trading hands.