Item 1.01. Entry Into a Material Definitive Agreement.
Amendment to Agreement and Plan of Merger
On June 25, 2020, Asta Funding, Inc., a Delaware corporation ("Asta"), entered
into Amendment No. 1 to Agreement and Plan of Merger (the "Amendment"). The
Amendment amends that certain Agreement and Plan of Merger (the "Merger
Agreement"), dated April 8, 2020, by and among Asta, Asta Finance Acquisition
Inc., a Delaware corporation ("Parent"), and Asta Finance Acquisition Sub Inc.,
a Delaware corporation and a wholly-owned subsidiary of Parent ("Merger Sub" and
together with Parent, the "Parent Parties"). Under the Merger Agreement, Merger
Sub shall merge with and into Asta, with Asta surviving the Merger as a
wholly-owned subsidiary of Parent (the "Merger").
Under the terms of the Amendment, if the Merger is completed, holders of shares
of the common stock of Asta (the "Common Stock") that are outstanding
immediately prior to the time of the consummation of the Merger (the "Effective
Time") shall be entitled to receive $13.10 in cash for each share of the Common
Stock held by such stockholders (the "Merger Consideration"), and all such
shares shall be automatically canceled and retired and shall cease to exist. The
Merger Agreement had originally provided that each such holder of shares of
Common Stock would be entitled to receive $11.47 in cash for each share of the
Common Stock. The Amendment also required Asta to enter into the Voting
Agreement (as defined below) as a condition and inducement to the willingness of
the Parent Parties to enter into the Amendment.
The foregoing summary of the Amendment is qualified in its entirety by reference
to the complete text of such document, which is filed as Exhibit 2.1 attached
hereto and which is incorporated herein by reference.
Voting Agreement
On June 25, 2020, in connection with the execution of the Amendment, RBF
Capital, LLC ("RBF"), who beneficially owns, in the aggregate, as of June 25,
2020, approximately 8.9% of the issued and outstanding shares of Common Stock,
entered into a Settlement and Voting Agreement (the "Voting Agreement") with
Asta, pursuant to which RBF has, among other things, agreed to vote the shares
of Common Stock beneficially owned by it, or that may become beneficially owned
by it during the term of the Voting Agreement, in favor of adopting of the
Merger Agreement, as amended by the Amendment, and any other matters necessary
for consummation of the Merger and the other transactions contemplated by the
Merger Agreement, as amended by the Amendment. Under the Voting Agreement, RBF
has agreed to restrictions on its ability to transfer the shares of Common Stock
owned by it, subject to certain exceptions. The obligations and rights under the
Voting Agreement terminate upon the earliest of (i) the Effective Time (as
defined in the Merger Agreement), (ii) the termination of the Merger Agreement,
or any further material (as determined in RBF's reasonable discretion) amendment
or modification of terms of such agreements (or for the avoidance of doubt the
Merger), and (iii) October 31, 2020.
The foregoing summary of the Voting Agreement is qualified in its entirety by
reference to the complete text of such document, which is filed as Exhibit 10.1
attached hereto and which is incorporated herein by reference.
Additional Information about the Merger and Where to Find It
In connection with the proposed Merger, Asta has filed with the Securities and
Exchange Commission (the "SEC") a proxy statement on Schedule 14A as well as a
Schedule 13E-3 Transaction Statement (the "Schedule 13E-3"), each of which will
be amended to reflect the updated terms contemplated by the Amendment. The proxy
statement and the Schedule 13E-3 will contain important information about Asta,
the Merger and related matters. Asta will mail or otherwise deliver the proxy
statement to its stockholders when it becomes available. Investors and
stockholders of Asta are urged to read carefully the proxy statement relating to
the Merger (including any amendments or supplements thereto) and the Schedule
13E-3 in their entirety when they are available, because they will contain
important information about the proposed Merger.
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Investors and stockholders of Asta will be able to obtain free copies of the
proxy statement and the Schedule 13E-3 for the proposed Merger (when it is
available) and other documents filed with the SEC by Asta through the website
maintained by the SEC at www.sec.gov. In addition, investors and stockholders of
Asta will be able to obtain free copies of the proxy statement and the Schedule
13E-3 for the proposed Merger (when they are available) by contacting Asta,
Attn: Seth Berman, sberman@astafunding.com.
Participants in the Merger
Asta and certain of its directors, executive officers and other members of
management and employees may, under SEC rules, be deemed to be "participants" in
the solicitation of proxies from stockholders of Asta with respect to the
proposed Merger. Information regarding the persons who may be considered
"participants" in the solicitation of proxies will be set forth in the Asta's
proxy statement relating to the proposed Merger when it is filed with the SEC.
Information regarding Asta's directors and executive officers is contained in
Asta's Annual Report on Form 10-K for the fiscal year ended September 30, 2019,
which was filed with the SEC on December 20, 2019 and amended on January 27,
2020, and will also be available in the proxy statement that will be filed by
Asta with the SEC in connection with the Merger.
Cautionary Statement Regarding Forward-Looking Statements
This document contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of
1934 and as that term is defined in the Private Securities Litigation Reform Act
of 1995, including, but not limited to, Asta's expectations or predictions of
future financial or business performance or conditions. Forward-looking
statements are sometimes identified by their use of the terms and phrases such
as "estimate," "project," "intend," "forecast," "anticipate," "plan," "planning,
"expect," "believe," "will," "will likely," "should," "could," "would," "may" or
the negative of such terms and other comparable terminology. These
forward-looking statements are subject to numerous assumptions, risks and
uncertainties, which change over time, are difficult to predict and are
generally beyond the control of Asta. Actual results may differ materially from
current projections.
Important factors that may cause actual results to differ materially from the
results discussed in the forward-looking statements or historical experience
include risks and uncertainties, including but not limited to, the ability of
the parties to consummate the proposed Merger? satisfaction of closing
conditions to the consummation of the proposed Merger? the impact of the
announcement or the closing of the Merger on the Asta's relationships with its
employees, existing customers or potential future customers; litigation and
stockholder claims related to and in connection with the Merger; and the ability
to realize anticipated benefits of the proposed Merger. Further information on
the factors and risks that could affect Asta's respective businesses, financial
conditions and results of operations are contained in Asta's filings with the
SEC, which are available at www.sec.gov. Forward-looking statements contained in
this Current Report on Form 8-K speak only as of the date hereof. Asta assumes
no obligation to update any forward-looking statement contained in this Current
Report on Form 8-K.
Item 8.01. Other Events.
On June 25, 2020, Asta issued a press release announcing the execution of the
Amendment and the Voting Agreement. The press release is attached as Exhibit
99.1 and is incorporated by reference herein.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. Description
2.1 Amendment No. 1 to Agreement and Plan of Merger, dated as of June 25,
2020, by and among Asta Finance Acquisition, Inc., Asta Finance
Acquisition Sub Inc. and Asta Funding, Inc.
10.1 Settlement and Voting Agreement, dated as of June 25, 2020, by and
between Asta Funding, Inc. and RBF Capital, LLC.
99.1 Press Release issued by Asta Funding, Inc. dated June 25, 2020.
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