ASTA FUNDING, INC. (NASDAQ:ASFI) Files An 8-K Other Events
Item 8.01.

As previously disclosed, Asta Funding, Inc. (the “Company”) entered into an Agreement and Plan of Merger, dated as of April 8, 2020, and as amended June 25, 2020, by and among the Company, Asta Finance Acquisition Inc. and Asta Finance Acquisition Sub Inc. (as may be amended from time to time, the “Merger Agreement”), to which each share of the Company’s common stock outstanding at the effective time of the Merger (other than shares held by Asta Funding Acquisition Inc. and stockholders properly exercising dissenter’s rights) will be converted into the right to receive $13.10 in cash and the Company will become a wholly-owned subsidiary of Asta Finance Acquisition Inc. (the “Merger”). On August 25, 2020, the Company filed with the Securities and Exchange Commission (the “SEC”) its definitive proxy statement on Schedule 14A (the “Definitive Proxy Statement”), relating to the virtual special meeting of stockholders to be held on September 25, 2020 to, among other things, vote on a proposal to adopt the Merger Agreement.

On September 9, 2020, a purported stockholder of the Company filed an individual action, captioned Kringe v. Asta Funding, Inc. et al., No. 120-cv-07323, in the United States District Court for the Southern District of New York (the “Complaint”), against the Company and the members of its Board of Directors. The Complaint generally alleges that the Definitive Proxy Statement omits certain material information in violation of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder, and further that the members of the Company’s Board of Directors are liable for those omissions under Section 20(a) of the Securities Exchange Act of 1934. The Complaint also alleges a state law breach of fiduciary duty claim against the members of the Company’s Board of Directors with respect to the same disclosures. The relief sought in the lawsuit includes, among other things, to enjoin the stockholder vote scheduled for September 25, 2020 at which the Company’s stockholders will vote on a proposal to adopt the Merger Agreement.

While the Company believes that the disclosures set forth in the Definitive Proxy Statement comply fully with applicable law, and vigorously denies any wrongdoing or liability with respect to the allegations and claims asserted, or which could have been asserted, in the Complaint, to resolve the alleged stockholder’s claims and moot the disclosure claims, to avoid nuisance, potential expense, and delay, and to provide supplemental information to the Company’s stockholders, the Company has determined to voluntarily supplement the Definitive Proxy Statement with the below disclosures. Nothing in the below supplemental disclosures shall be deemed an admission of the legal necessity or materiality under applicable law of any of the disclosures set forth herein or in the Definitive Proxy Statement. To the contrary, the Company denies all allegations that any additional disclosure was, or is, required.

In accordance with the applicable rules of the SEC, the Company previously disclosed a presentation of Lincoln International LLC made to the special committee of the Board of Directors of the Company, which was filed as Exhibit (c)(6) to its Schedule 13E-3/A filed with the SEC on July 24, 2020 (the “Previously Disclosed Presentation”). Nevertheless, the Company now discloses again in this Current Report on Form 8-K selected pages of the Previously Disclosed Presentation (the “Selected Pages”). Accordingly, a copy of the Selected Pages are attached as Exhibit 99.1 hereto and incorporated herein by reference.

Additional Information about the Merger and Where to Find It

In connection with the Merger, the Company filed with the SEC a proxy statement on Schedule 14A as well as a Schedule 13E-3 Transaction Statement (as has been amended from time to time). The proxy statement and the Schedule 13E-3 (and amendments thereto) contain important information about the Company, the Merger and related matters. The Company began mailing the proxy statement to stockholders on August 25, 2020. Investors and stockholders of the Company are urged to read carefully the proxy statement relating to the Merger (including any amendments or supplements thereto) and the Schedule 13E-3 (and amendments thereto) in their entirety, because they contain important information about the Merger.

Investors and stockholders of the Company may obtain free copies of the proxy statement and the Schedule 13E-3 (and amendments thereto) for the Merger and other documents filed with the SEC by the Company through the website maintained by the SEC at www.sec.gov. In addition, investors and stockholders of the Company may obtain free copies of the proxy statement and the Schedule 13E-3 (and amendments thereto) for the Merger by contacting the Company, Attn: Seth Berman, [email protected].