##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 OR
 o
    
    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.
  Delaware
    
    22-3388607(State or other jurisdiction 
of incorporation or organization)
    
    (IRS Employer
Identification No.)210 Sylvan Ave., Englewood Cliffs, New Jersey
(Address of principal executive offices)
    
    07632
(Zip Code)
 Registrants telephone number: (201) 567-5648
  þ o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ




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##### 



ASTA FUNDING, INC. AND SUBSIDIARIES
 INDEX TO FORM 10-Q
 Part I. Financial Information
    
    
    2Item 1. Financial Statements
    
    
    2Condensed Consolidated Balance Sheets as of March 31, 2008 (unaudited) and
September 30, 2007
    
    
    2Condensed
Consolidated Statements of Operations for the three and six month periods ended
March 31, 2008 and 2007 (unaudited)
    
    
    3Condensed
Consolidated Statement of Stockholders Equity for the six month period ended
March 31, 2008 (unaudited)
    
    
    4Condensed Consolidated Statements of Cash Flows for the six month periods ended
March 31, 2008 and 2007 (unaudited)
    
    
    5Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    31Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    45Item 4. Controls and Procedures
    
    
    46Part II. Other Information
    
    
    47Item 1. Legal Proceedings
    
    
    47Item 1A Risk Factors
    
    
    47Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
    
    
    48Item 3. Defaults Upon Senior Securities
    
    
    48Item 4. Submission of Matters to a Vote of Security Holders
    
    
    48Item 5. Other Information
    
    
    49Item 6. Exhibits
    
    
    49Signatures
    
    
    50EX-10.1: THIRD AMENDMENT TO THE RECEIVABLES FINANCING AGREEMENTEX-10.2: AMENDED AND RESTATED SERVICING AGREEMENTEx-31.1 CertificationEx-31.2 CertificationEX-32.1 CertificationEX-32.2 Certification




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 ASTA FUNDING, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31,
    
    
    September 30,2008
    
    
    2007(Unaudited)AssetsCash
    
    $
    3,589,000
    
    
    $
    4,525,000Restricted cash
    
    
    5,048,000
    
    
    
    5,694,000Consumer receivables acquired for liquidation (at net realizable value)
    
    
    512,256,000
    
    
    
    545,623,000Due from third party collection agencies and attorneys
    
    
    5,211,000
    
    
    
    4,909,000Investment in venture
    
    
    1,162,000
    
    
    
    2,040,000Furniture and equipment, net
    
    
    797,000
    
    
    
    793,000Deferred income taxes
    
    
    22,465,000
    
    
    
    12,349,000Other assets and investments
    
    
    4,285,000
    
    
    
    4,323,000Total assets
    
    $
    554,813,000
    
    
    $
    580,256,000Liabilities And Stockholders EquityLiabilitiesDebt
    
    $
    293,857,000
    
    
    $
    326,466,000Other liabilities
    
    
    3,558,000
    
    
    
    7,537,000Dividends payable
    
    
    571,000
    
    
    
    557,000Income taxes payable
    
    
    11,397,000
    
    
    
    8,161,000Total liabilities
    
    
    309,383,000
    
    
    
    342,721,000Stockholders EquityPreferred stock, $.01 par value; authorized 5,000,000 shares; issued
and outstanding  noneCommon stock, $.01 par value; authorized 30,000,000 shares; issued
and outstanding  14,276,158 at March 31, 2008 and 13,918,158
at September 30, 2007
    
    
    143,000
    
    
    
    139,000Additional paid-in capital
    
    
    68,442,000
    
    
    
    65,030,000Retained earnings
    
    
    176,845,000
    
    
    
    172,366,000Total stockholders equity
    
    
    245,430,000
    
    
    
    237,535,000Total liabilities and stockholders equity
    
    $
    554,813,000
    
    
    $
    580,256,000
  -2-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedMarch 31, 2008
    
    
    March 31, 2007
    
    
    March 31, 2008
    
    
    March 31, 2007Revenues:Finance income, net
    
    $
    33,878,000
    
    
    $
    32,353,000
    
    
    
    68,013,000
    
    
    $
    57,294,000Other income
    
    
    4,000
    
    
    
    255,000
    
    
    
    144,000
    
    
    
    459,00033,882,000
    
    
    
    32,608,000
    
    
    
    68,157,000
    
    
    
    57,753,000Expenses:General and administrative
    
    
    7,124,000
    
    
    
    5,790,000
    
    
    
    12,929,000
    
    
    
    10,878,000Interest
    
    
    4,711,000
    
    
    
    3,779,000
    
    
    
    10,652,000
    
    
    
    5,298,000Impairments
    
    
    35,000,000
    
    
    
    2,412,000
    
    
    
    35,000,000
    
    
    
    2,412,00046,835,000
    
    
    
    11,981,000
    
    
    
    58,581,000
    
    
    
    18,588,000(Loss) income before equity in
earnings (loss) of venture and income tax
    
    
    (12,953,000
    )
    
    
    20,627,000
    
    
    
    9,576,000
    
    
    
    39,165,000Equity in (loss) earnings of venture
    
    
    (1,000
    )
    
    
    475,000
    
    
    
    (78,000
    )
    
    
    975,000Income tax (benefit)expense
    
    
    (5,247,000
    )
    
    
    8,550,000
    
    
    
    3,891,000
    
    
    
    16,262,000Net (loss) Income
    
    $
    (7,707,000
    )
    
    $
    12,552,000
    
    
    $
    5,607,000
    
    
    $
    23,878,000Net (loss) income per share:Basic
    
    $
    (0.54
    )
    
    $
    0.91
    
    
    $
    0.40
    
    
    $
    1.73Diluted
    
    $
    (0.54
    )
    
    $
    0.85
    
    
    $
    0.38
    
    
    $
    1.63Weighted average number of common shares outstanding:Basic


    14,201,674
    


    13,848,194
    
    
    
    14,059,142
    
    
    
    13,772,538Diluted
    
    
    14,201,674
    
    
    
    14,744,499
    
    
    
    14,742,549
    
    
    
    14,647,556
  -3-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
 (Unaudited)
 Additional
    
    
    RetainedShares
    
    
    Amount
    
    
    Paid-in Capital
    
    
    Earnings
    
    
    TotalBalance, September 30, 2007
    
    
    13,918,158
    
    
    $
    139,000
    
    
    $
    65,030,000
    
    
    $
    172,366,000
    
    
    $
    237,535,000Exercise of options
    
    
    300,000
    
    
    
    3,000
    
    
    
    422,000
    
    
    
    
    
    
    
    425,000Restricted stock granted
    
    
    58,000
    
    
    
    1,000
    
    
    
    (1,000
    )
    
    
    
    
    
    
    Stock based compensation expense
    
    
    
    
    
    
    
    
    
    
    450,000
    
    
    
    
    
    
    
    450,000Tax benefit arising from exercise of non-
qualified stock options
    
    
    
    
    
    
    
    
    
    
    2,541,000
    
    
    
    
    
    
    
    2,541,000Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,128,000
    )
    
    
    (1,128,000
    )Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,607,000
    
    
    
    5,607,000Balance, March 31, 2008
    
    
    14,276,158
    
    
    $
    143,000
    
    
    $
    68,442,000
    
    
    $
    176,845,000
    
    
    $
    245,430,000
  -4-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2008
    
    
    March 31, 2007Cash flows from operating activities:Net income
    
    $
    5,607,000
    
    
    $
    23,878,000Adjustments to reconcile net income to net cash provided by
operating activities:Depreciation and amortization
    
    
    549,000
    
    
    
    201,000Deferred income taxes
    
    
    (10,116,000
    )
    
    
    (5,039,000
    )Impairments
of consumer receivables acquired for liquidation
    
    
    35,000,000
    
    
    
    2,412,000Stock based compensation
    
    
    450,000
    
    
    
    768,000Changes in:Due from third party collection agencies and attorneys
    
    
    (302,000
    )
    
    
    (505,000
    )Income taxes payable
    
    
    3,236,000
    
    
    
    (33,000
    )Other assets
    
    
    (361,000
    )
    
    
    (2,295,000
    )Other liabilities
    
    
    (3,978,000
    )
    
    
    (70,000
    )Net cash provided by operating activities
    
    
    30,085,000
    
    
    
    19,317,000Cash flows from investing activities:Purchase of consumer receivables acquired for liquidation
    
    
    (41,307,000
    )
    
    
    (386,682,000
    )Principal collected on receivables acquired for liquidation
    
    
    32,199,000
    
    
    
    61,324,000Principal collected on receivable accounts represented by
account sales
    
    
    7,475,000
    
    
    
    16,487,000Cash distributions received from venture
    
    
    800,000
    
    
    
    2,925,000Loss (earnings) on investment in venture
    
    
    78,000
    
    
    
    (975,000
    )Purchase of other investments
    
    
    
    
    
    
    (5,771,000
    )Collections on other investments
    
    
    
    
    
    
    2,788,000Capital expenditures
    
    
    (155,000
    )
    
    
    (105,000
    )Net cash used in investing activities
    
    
    (910,000
    )
    
    
    (310,009,000
    )Cash flows from financing activities:Proceeds from exercise of options
    
    
    425,000
    
    
    
    1,207,000Tax benefit arising from non-qualified options
    
    
    2,541,000
    
    
    
    680,000Change in restricted cash
    
    
    646,000
    
    
    
    Dividends paid
    
    
    (1,114,000
    )
    
    
    (6,603,000
    )(Repayments) advances under lines of credit, net
    
    
    (32,609,000
    )
    
    
    294,351,000Net cash (used in) provided by financing activities
    
    
    (30,111,000
    )
    
    
    289,635,000Decrease in cash
    
    
    (936,000
    )
    
    
    (1,057,000
    )Cash at the beginning of period
    
    
    4,525,000
    
    
    
    7,826,000Cash at end of period
    
    $
    3,589,000
    
    
    $
    6,769,000Supplemental disclosure of cash flow information:Cash paid during the periodInterest
    
    $
    10,836,000
    
    
    $
    3,588,000Income taxes
    
    $
    8,198,000
    
    
    $
    20,655,000
  -5-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1: Business and Basis of Presentation
 Business
  Basis of Presentation
    -6-




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ASTA FUNDING, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued
 Note 1: Business and Basis of Presentation ( continued )
 Recent Accounting Pronouncements
 Disclosures about Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No.
133
  Share-Based Payment
 Noncontrolling Interests in
Consolidated Financial Statementsan amendment of ARB No. 51.
      -7-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued
 Note 1: Business and Basis of Presentation ( continued )
 Recent Accounting Pronouncements (continued)
   Business Combinations  Business
Combinations
            -8-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued
 Note 1: Business and Basis of Presentation ( continued )
 Recent Accounting Pronouncements (continued)
 Application of Accounting Principles to Loan
Commitments Accounting for Derivative Instruments and Hedging Activities Accounting
for Servicing of Financial Assets The
Fair Value Option for Financial Assets and Financial Liabilities,
 The Fair Value Option for Financial
Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115
 -9-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 1: Business and Basis of Presentation ( continued)
 Recent Accounting Pronouncements (continued)
 Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106
and 132(R)
 Fair Value Measurements
 Accounting for Uncertainty in
Income Taxes  an interpretation of FASB Statement
No. 109
 Reclassifications
  Note 2: Principles of Consolidation
  -10-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 3: Consumer Receivables Acquired for Liquidation
     
    
    the interest method; or
    
    the cost recovery method.
   -11-




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 3: Consumer Receivables Acquired for Liquidation  ( continued )
  
    
    Same issuer/originator;
    
    Same underlying credit quality;
    
    Similar geographic distribution of the accounts;
    
    Similar age of the receivable; and
    
    Same type of asset class (credit cards, telecom etc.)
  
    
    The number of collection agencies previously attempting to collect the receivables in the portfolio;
    
    The average balance of the receivables, as higher balances might be more difficult to collect while
low balances might not be cost effective to collect;
    
    The age of the receivables, as older receivables might be more difficult to collect or might be
less cost effective. On the other hand, the passage of time, in certain circumstances, might result
in higher collections due to changing life events of some individual debtors;
    
    Past history of performance of similar assets;
    
    Number of days since charge-off;
    
    Payments made since charge-off;
    
    The credit originator and its credit guidelines;
    
    Our ability to analyze accounts and resell accounts that meet our criteria for resale;
    
    The locations of the debtors, as there are better states to attempt to collect in and ultimately the
Company has better predictability of the liquidations and the expected cash flows. Conversely,
there are also states where the liquidation rates are not as favorable and that is factored into
our cash flow analysis;
    
    Jobs or property of the debtors found within portfolios. In business model, this is of particular
importance. Debtors with jobs or property are more likely to repay their obligation and conversely,
debtors without jobs or property are less likely to repay their obligation; and
    
    The ability to obtain customer statements from the original issuer.
 -12-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 3: Consumer Receivables Acquired for Liquidation  ( continued )
   For the Six Months Ended March 31, 2008Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    508,515,000
    
    
    $
    37,108,000
    
    
    $
    545,623,000Acquisitions of receivable portfolios, net
    
    
    20,155,000
    
    
    
    21,152,000
    
    
    
    41,307,000Net cash collections from collection of consumer
receivables acquired for liquidation (1)
    
    
    (87,703,000
    )
    
    
    (7,330,000
    )
    
    
    (95,033,000
    )Net cash collections represented by account sales of
consumer receivables acquired for liquidation
    
    
    (12,654,000
    )
    
    
    
    
    
    
    (12,654,000
    )Impairments
    
    
    (35,000,000
    )
    
    
    
    
    
    
    (35,000,000
    )Finance income recognized (2)
    
    
    67,310,000
    
    
    
    703,000
    
    
    
    68,013,000Balance, end of period
    
    $
    460,623,000
    
    
    $
    51,633,000
    
    
    $
    512,256,000Finance income as a percentage of collections
    
    
    67.1
    %
    
    
    9.6
    %
    
    
    63.2
    %
 
 (1)
    
    Includes the put back of a portfolio purchased and returned to the seller in the
amount of $2.8 million in the first quarter of fiscal 2008.(2)
    
    Includes $23.9 million derived from fully amortized interest method pools. -13-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 3: Consumer Receivables Acquired for Liquidation  ( continued )
 For the Six Months Ended March 31, 2007Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    256,199,000
    
    
    $
    1,076,000
    
    
    $
    257,275,000Acquisitions of receivable portfolios, net
    
    
    345,798,000
    
    
    
    40,884,000
    
    
    
    386,682,000Net cash collections from collection of consumer
receivables acquired for liquidation
    
    
    (102,015,000
    )
    
    
    (2,089,000
    )
    
    
    (104,104,000
    )Net cash collections represented by account sales of
consumer receivables acquired for liquidation
    
    
    (26,754,000
    )
    
    
    (4,247,000
    )
    
    
    (31,001,000
    )Transferred to cost recovery (1)
    
    
    (4,478,000
    )
    
    
    4,478,000
    
    
    
    Impairments
    
    
    (2,412,000
    )
    
    
    
    
    
    
    (2,412,000
    )Finance income recognized (2)
    
    
    56,007,000
    
    
    
    1,287,000
    
    
    
    57,294,000Balance, end of period
    
    $
    522,345,000
    
    
    $
    41,389,000
    
    
    $
    563,734,000Finance income as a percentage of collections
    
    
    43.5
    %
    
    
    20.3
    %
    
    
    42.4
    %
 
 (1)
    
    Represents a portfolio acquired during the three months ended December 31, 2006 which
the Company successfully returned to the seller at the original purchase value.(2)
    
    Includes $5.5 million derived from fully amortized interest method pools. For the Three Months Ended March 31, 2008Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    509,580,000
    
    
    $
    49,794,000
    
    
    $
    559,374,000Acquisitions of receivable portfolios, net
    
    
    239,000
    
    
    
    3,559,000
    
    
    
    3,798,000Net cash collections from collections of consumer
receivables acquired for liquidation
    
    
    (42,807,000
    )
    
    
    (2,124,000
    )
    
    
    (44,931,000
    )Net cash collections represented by account sales of
consumer receivables acquired for liquidation
    
    
    (4,863,000
    )
    
    
    
    
    
    
    (4,863,000
    )Impairments
    
    
    (35,000,000
    )
    
    
    
    
    
    
    (35,000,000
    )Finance income recognized (1)
    
    
    33,474,000
    
    
    
    404,000
    
    
    
    33,878,000Balance, end of period
    
    $
    460,623,000
    
    
    $
    51,633,000
    
    
    $
    512,256,000Finance income as a percentage of collections
    
    
    70.2
    %
    
    
    19.0
    %
    
    
    68.0
    %
 
 (1)
    
    Includes $12.2 million derived from fully amortized interest method pools. -14-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 3: Consumer Receivables Acquired for Liquidation  ( continued )
 For the Three Months Ended March 31, 2007Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    281,852,000
    
    
    $
    3,671,000
    
    
    $
    285,523,000Acquisitions of receivable portfolios, net
    
    
    288,224,000
    
    
    
    36,191,000
    
    
    
    324,415,000Net cash collections from collections of consumer
receivables acquired for liquidation
    
    
    (60,765.000
    )
    
    
    (1,461,000
    )
    
    
    (62,226,000
    )Net cash collections represented by account sales of
consumer receivables acquired for liquidation
    
    
    (11,825,000
    )
    
    
    (2,094,000
    )
    
    
    (13,919,000
    )Transfer to cost recovery (1)
    
    
    (4,478,000
    )
    
    
    4,478,000
    
    
    
    Impairment
    
    
    (2,412,000
    )
    
    
    
    
    
    
    (2,412,000
    )Finance income recognized (2)
    
    
    31,749,000
    
    
    
    604,000
    
    
    
    32,353,000Balance, end of period
    
    $
    522,345,000
    
    
    $
    41,389,000
    
    
    $
    563,734,000Finance income as a percentage of collections
    
    
    43.7
    %
    
    
    17.0
    %
    
    
    42.5
    %
 
 (1)
    
    Represents a portfolio acquired during the three months ended
December 31, 2006 which
the Company successfully retuned to the seller at the original purchase value.(2)
    
    Includes approximately $500,000 derived from fully amortized interest method pools.  September 30, 2008 (six months ending)
    
    $
    65,129,000September 30, 2009
    
    
    121,507,000September 30, 2010
    
    
    114,680,000September 30, 2011
    
    
    71,295,000September 30, 2012
    
    
    52,013,000September 30, 2013
    
    
    44,012,000Total
    
    
    468,636,000Deferred revenue
    
    
    (8,013,000
    )Total
    
    $
    460,623,000
 -15-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 3: Consumer Receivables Acquired for Liquidation  ( continued )
  Six Months
    
    
    Six MonthsEnded
    
    
    EndedMarch 31, 2008
    
    
    March 31, 2007Balance at beginning of period
    
    $
    176,615,000
    
    
    $
    143,800,000Income recognized on finance receivables, net
    
    
    (47,049,000
    )
    
    
    (56,007,000
    )Additions representing expected revenue from purchases
    
    
    7,322,000
    
    
    
    131,570,000Reclassifications from nonaccretable difference
    
    
    52,546,000
    
    
    
    7,508,000Balance at end of period
    
    $
    189,434,000
    
    
    $
    226,871,000
 Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31, 2008
    
    
    March 31, 2007Balance at beginning of period
    
    $
    172,690,000
    
    
    $
    138,966,000Income recognized on finance receivables, net
    
    
    (23,098,000
    )
    
    
    (31,749,000
    )Additions representing expected revenue from purchases
    
    
    115,000
    
    
    
    112,146,000Reclassifications from nonaccretable difference
    
    
    39,727,000
    
    
    
    7,508,000Balance at end of period
    
    $
    189,434,000
    
    
    $
    226,871,000
  -16-




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 3: Consumer Receivables Acquired for Liquidation- (continued)
  For the Six Months Ended March 31,2008
    
    
    2007Gross collections (1)
    
    $
    176,688,000
    
    
    $
    192,815,000Commissions and fees (2)
    
    
    69,001,000
    
    
    
    57,710,000Net collections
    
    $
    107,687,000
    
    
    $
    135,105,000
 For the Three Months Ended March 31,2008
    
    
    2007Gross collections (1)
    
    $
    87,432,000
    
    
    $
    106,119,000Commissions and fees (2)
    
    
    37,638,000
    
    
    
    29,974,000Net collections
    
    $
    49,794,000
    
    
    $
    76,145,000
 
 (1)

Gross collections include: collections by third-party collection agencies and attorneys,
collections from our in-house efforts, collections represented by account sales and the put back of
a portfolio returned to the seller in the amount of $2.8 million in the first quarter of fiscal
2008.(2)

Commissions and fees are the contractual commission earned by third party collection
agencies and attorneys, and direct costs associated with the collection effort, generally court
costs. Includes a 3% fee charged by a servicer on gross collections received by the Company in
connection with the Portfolio Purchase. Such arrangement was consummated in December 2007, but
effective as of March, 2007. The fee is charged for asset location, skiptracing and ultimately
identifying debtors worthy of the Companys suit strategy in connection with the Portfolio
Purchase.
 Note 4: Acquisition and Investment in venture
   -17-




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 5: Furniture and Equipment
  March 31,
    
    
    September 30,2008
    
    
    2007Furniture
    
    $
    310,000
    
    
    $
    307,000Leasehold improvements
    
    
    37,000
    
    
    
    Equipment
    
    
    2,648,000
    
    
    
    2,534,0002,995,000
    
    
    
    2,841,000Less accumulated depreciation
    
    
    2,198,000
    
    
    
    2,048,000Balance, end of period
    
    $
    797,000
    
    
    $
    793,000
 Note 6: Debt
  -18-




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,
      -19-




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Note 7: Commitments and Contingencies
 Employment Agreements
    -20-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 7: Commitments and Contingencies  (continued)
     Leases
  Litigation
    -21-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 8: Income Recognition and Impairments
 Income Recognition
   Impairments
   
    
    The type of receivable, the location of the debtor and the number of
collection agencies previously attempting to collect the receivables in
the portfolio. We have found that there are better states to try collect
receivables and we factor in both good and bad states when establishing
our initial cash flow expectations.
    
    the average balance of the receivables influence our analysis in that
lower average balance portfolios tend to be more collectible in the
short-term and higher average balance portfolios are more suitable for our
suit strategy and thus yield better results over the longer term. As we
have significant experience with both types of balances, we are able to
factor these variables into our initial expected cash flows;
    
    the age of the receivables, the number of days since charge-off, the
payments, if any, since charge-off, and the credit guidelines of the
credit originator also represent factors taken into consideration in our
estimation process since, for example, older receivables might be more
difficult to collect in amount and/or require more time to collect;
 -22-




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##### Table of Contents




    
    past history and performance of similar assets acquired. As we purchase
portfolios of like assets, we have built significant history on the
tendencies of debtor repayments and factor this into our initial expected
cash flows;
    
    our ability to analyze accounts and resell accounts that meet our criteria;
    
    Jobs or property of the debtors found within portfolios. With our business
model, this is of particular importance. Debtors with jobs or property are
more likely to repay their obligation through the suit strategy and
conversely, debtors without jobs or property are less likely to repay
their obligation. While we believe that debtors with jobs or property are
more likely to repay, we also believe that these debtors generally might
take longer to repay and that is factored into our initial expected cash
flows.
    Note 9: Income Taxes
  -23-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS   Continued  (Unaudited)
 Note 10: Net Income Per Share
   Six Months Ended March 31,2008
    
    
    2007Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedNet
    
    
    Average
    
    
    Per Share
    
    
    Net
    
    
    Average
    
    
    Per ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    AmountBasic
    
    $
    5,607,000
    
    
    
    14,059,142
    
    
    $
    0.40
    
    
    $
    23,878,000
    
    
    
    13,772,538
    
    
    $
    1.73Effect of Dilutive Stock
    
    
    
    
    
    
    683,407
    
    
    
    
    
    
    
    
    
    
    
    875,018Diluted
    
    $
    5,607,000
    
    
    
    14,742,549
    
    
    $
    0.38
    
    
    $
    23,878,000
    
    
    
    14,647,556
    
    
    $
    1.63
 Three Months Ended March 31,2008
    
    
    2007Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedNet
    
    
    Average
    
    
    Per Share
    
    
    Net
    
    
    Average
    
    
    Per Share(Loss)
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    AmountBasic
    
    $
    (7.707,000
    )
    
    
    14,201,674
    
    
    $
    (0.54
    )
    
    $
    12,552,000
    
    
    
    13,848,194
    
    
    $
    0.91Effect of Dilutive Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    896,305Diluted
    
    $
    (7,707,000
    )
    
    
    14,201,674
    
    
    $
    (0.54
    )
    
    $
    12,552,000
    
    
    
    14,744,499
    
    
    $
    0.85
 Note 11: Stock-based Compensation
    -24-




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS   Continued  (Unaudited)
 Note 11: Stock-based Compensation (continued)
    Risk-free interest rate
    
    
    4.94
    %Expected term (years)
    
    
    10.0Expected volatility
    
    
    36.3
    %Dividend yield
    
    
    0.47
    %
 Note 12: Stock Option Plans
 Equity Compensation Plan
    -25-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued
 Note 12: Stock Option Plans ( continued )
  2002 Stock Option Plan
    1995 Stock Option Plan
    -26-




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ( Continued )
 (unaudited)
 Note 12: Stock-Option Plans  (Continued)
  Six Months Ended March 31,2008
    
    2007Weighted
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    ExerciseShares
    
    Price
    
    Shares
    
    PriceOutstanding options at the beginning of period
    
    
    1,337,438
    
    
    $
    9.38
    
    
    
    1,414,439
    
    
    $
    9.45Options granted
    
    
    -0-
    
    
    $
    -0-
    
    
    
    18,000
    
    
    $
    28.75Options exercised
    
    
    (300,000
    )
    
    $
    1.42
    
    
    
    (80,001
    )
    
    $
    15.10Options cancelled
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-
    
    
    
    -0-Outstanding options at the end of period
    
    
    1,037,438
    
    
    $
    11.69
    
    
    
    1,352,438
    
    
    $
    9.37Exercisable options at the end of period
    
    
    1,031,438
    
    
    $
    11.59
    
    
    
    1,340,438
    
    
    $
    9.20
  Options Outstanding
    
    Options ExercisableWeightedAverage
    
    Weighted
    
    
    
    
    
    WeightedRemaining
    
    Average
    
    
    
    
    
    AverageNumber
    
    Contractual
    
    Exercise
    
    Number
    
    ExerciseRange of Exercise Price
    
    Outstanding
    
    Life (in Years)
    
    Price
    
    Exercisable
    
    Price$0.8125 - $2.8750
    
    
    300,000
    
    
    
    2.5
    
    
    $
    2.63
    
    
    
    300,000
    
    
    $
    2.63$2.8751 - $5.7500
    
    
    106,667
    
    
    
    4.6
    
    
    $
    4.73
    
    
    
    106,667
    
    
    $
    4.73$5.7501 - $8.6250
    
    
    12,000
    
    
    
    3.6
    
    
    $
    5.96
    
    
    
    12,000
    
    
    $
    5.96$14.3751 - $17.2500
    
    
    218,611
    
    
    
    5.7
    
    
    $
    15.04
    
    
    
    218,611
    
    
    $
    15.04$17.2501 - $20.1250
    
    
    382,160
    
    
    
    6.5
    
    
    $
    18.22
    
    
    
    382,160
    
    
    $
    18.22$25.8751 - $28.7500
    
    
    18,000
    
    
    
    8.7
    
    
    $
    28.75
    
    
    
    12,000
    
    
    $
    28.751,037,438
    
    
    
    5.0
    
    
    $
    11.69
    
    
    
    1,031,438
    
    
    $
    11.59
   -27-




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ASTA FUNDING, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ( Continued )
 (unaudited)
 Note 12: Stock-Option Plans  (Continued)
  WeightedSix Months
    
    AverageEnded
    
    Grant DateMarch 31, 2008
    
    Fair ValueUnvested at beginning of period
    
    
    45,333
    
    
    $
    28.75Awards granted
    
    
    58,000
    
    
    $
    19.73Vested
    
    
    (22,666
    )
    
    $
    28.75Forfeited
    
    
    0
    
    
    $
    0.00Unvested at end of period
    
    
    80,667
    
    
    $
    22.26
  Note 13: Stockholders Equity
  Note 14: Subsequent Events
    -28-




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ASTA FUNDING, INC. AND SUBSIDIARIES
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  ( Continued )
 (unaudited)
 Note
14: Subsequent Events (continued)
     -29-




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-30-




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
  
    
    charged-off receivables accounts that have been written-off by the
originators and may have been previously serviced by collection
agencies;
    
    semi-performing receivables accounts where the debtor is currently
making partial or irregular monthly payments, but the accounts may
have been written-off by the originators; and
    
    performing receivables accounts where the debtor is making regular
monthly payments that may or may not have been delinquent in the past.
   
    
    our relationships with industry participants, collection agencies, investors and our financing sources;
    
    brokers who specialize in the sale of consumer receivable portfolios; and
    
    other sources.
 Caution Regarding Forward Looking Statements
  www.astafunding.com. www.sec.gov
 -31-




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Critical Accounting Policies
     
    
    the interest method; or
    
    the cost recovery method.
    -32-




---



##### Table of Contents




    
    Same issuer/originator;
    
    Same underlying credit quality;
    
    Similar geographic distribution of the accounts;
    
    Similar age of the receivable; and
    
    Same type of asset class (credit cards, telecom etc.)
  
    
    The number of collection agencies previously attempting to collect the receivables in the portfolio;
    
    the average balance of the receivables, as higher balances might be more difficult to collect while
low balances might not be cost effective to collect;
    
    the age of the receivables, as older receivables might be more difficult to collect or might be
less cost effective. On the other hand, the passage of time, in certain circumstances, might result
in higher collections due to changing life events of some individual debtors;
    
    past history of performance of similar assets;
    
    number of days since charge-off;
    
    payments made since charge-off;
    
    the credit originator and its credit guidelines;
    
    our ability to analyze accounts and resell accounts that meet our criteria for resale;
    
    the locations of the debtors as there are better states to attempt to collect in and ultimately the
Company has better predictability of the liquidations and the expected cash flows. Conversely,
there are also states where the liquidation rates are not as favorable and that is factored into
our cash flow analysis;
    
    Jobs or property of the debtors found within portfolios-with our business model, this is of
particular importance. Debtors with jobs or property are more likely to repay their obligation and
conversely, debtors without jobs or property are less likely to repay their obligation ; and
    
    the ability to obtain customer statements from the original issuer.
    -33-




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##### Table of Contents



Results of Operations
 The six-month period ended March 31, 2008, compared to the six-month period ended
March 31, 2007
 Finance income
   Other income .
 General and Administrative Expenses
 Interest Expense.
 -34-




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##### Table of Contents



Impairments.
 Equity in (loss) of venture .
 The three-month period ended March 31, 2008, compared to the three-month period ended
March 31, 2007
 Finance income
   Other income .
 -35-




---



##### Table of Contents



General and Administrative Expenses
 Interest Expense.
 Impairments.
 Equity in (loss) of venture .
 Liquidity and Capital Resources
  -36-




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.
    -37-




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-38-




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##### Table of Contents



For the Six Months Ended March 31, 2008Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    508,515,000
    
    
    $
    37,108,000
    
    
    $
    545,623,000Acquisitions of receivable portfolios, net
    
    
    20,155,000
    
    
    
    21,152,000
    
    
    
    41,307,000Net cash collections from collection of consumer
receivables acquired for liquidation (1)
    
    
    (87,703,000
    )
    
    
    (7,330,000
    )
    
    
    (95,033,000
    )Net cash collections represented by account sales ofconsumer receivables acquired for liquidation
    
    
    (12,654,000
    )
    
    
    
    
    
    
    (12,654,000
    )Impairments
    
    
    (35,000,000
    )
    
    
    
    
    
    
    (35,000,000
    )Finance income recognized (2)
    
    
    67,310,000
    
    
    
    703,000
    
    
    
    68,013,000Balance, end of period
    
    $
    460,623,000
    
    
    $
    51,633,000
    
    
    $
    512,256,000Finance income as a percentage of collections
    
    
    67.1
    %
    
    
    9.6
    %
    
    
    63.2
    %
 
 (1)
    
    Includes the put back of a portfolio purchased and returned to the seller in the
amount of $2.8 million in the first quarter of fiscal 2008.(2)
    
    Includes $23.9 million derived from fully amortized interest method pools. -39-




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##### Table of Contents



For the Six Months Ended March 31, 2007Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    256,199,000
    
    
    $
    1,076,000
    
    
    $
    257,275,000Acquisitions of receivable portfolios, net
    
    
    345,798,000
    
    
    
    40,884,000
    
    
    
    386,682,000Net cash collections from collection of consumer
receivables acquired for liquidation
    
    
    (102,015,000
    )
    
    
    (2,089,000
    )
    
    
    (104,104,000
    )Net cash collections represented by account sales of
consumer receivables acquired for liquidation
    
    
    (26,754,000
    )
    
    
    (4,247,000
    )
    
    
    (31,001,000
    )Transferred to cost recovery (1)
    
    
    (4,478,000
    )
    
    
    4,478,000
    
    
    
    Impairments
    
    
    (2,412,000
    )
    
    
    
    
    
    
    (2,412,000
    )Finance income recognized (2)
    
    
    56,007,000
    
    
    
    1,287,000
    
    
    
    57,294,000Balance, end of period
    
    $
    522,345,000
    
    
    $
    41,389,000
    
    
    $
    563,734,000Finance income as a percentage of collections
    
    
    43.5
    %
    
    
    20.3
    %
    
    
    42.4
    %
 
 (1)
    
    Represents a portfolio acquired during the three months ended December 31, 2006 which
the Company successfully retuned to the seller at the original purchase value.(2)
    
    Includes $5.5 million derived from fully amortized interest method pools. For the Three Months Ended March 31, 2008Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    509,580,000
    
    
    $
    49,794,000
    
    
    $
    559,374,000Acquisitions of receivable portfolios, net
    
    
    239,000
    
    
    
    3,559,000
    
    
    
    3,798,000Net cash collections from collections of consumer
receivables acquired for liquidation
    
    
    (42,807,000
    )
    
    
    (2,124,000
    )
    
    
    (44,931,000
    )Net cash collections represented by account sales of
consumer receivables acquired for liquidation
    
    
    (4,863,000
    )
    
    
    
    
    
    
    (4,863,000
    )Impairments
    
    
    (35,000,000
    )
    
    
    
    
    
    
    (35,000,000
    )Finance income recognized (1)
    
    
    33,474,000
    
    
    
    404,000
    
    
    
    33,878,000Balance, end of period
    
    $
    460,623,000
    
    
    $
    51,633,000
    
    
    $
    512,256,000Finance income as a percentage of collections
    
    
    70.2
    %
    
    
    19.0
    %
    
    
    68.0
    %
 
 (1)
    
    Includes $12.2 million derived from fully amortized interest method pools. -40-




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##### Table of Contents



For the Three Months Ended March 31, 2007Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    281,852,000
    
    
    $
    3,671,000
    
    
    $
    285,523,000Acquisitions of receivable portfolios, net
    
    
    288,224,000
    
    
    
    36,191,000
    
    
    
    324,415,000Net cash collections from collections of consumer
receivables acquired for liquidation
    
    
    (60,765 000
    )
    
    
    (1,461,000
    )
    
    
    (62,226,000
    )Net cash collections represented by account sales of
consumer receivables acquired for liquidation
    
    
    (11,825,000
    )
    
    
    (2,094,000
    )
    
    
    (13,919,000
    )Transfer to cost recovery (1)
    
    
    (4,478,000
    )
    
    
    4,478,000
    
    
    
    Impairment
    
    
    (2,412,000
    )
    
    
    
    
    
    
    (2,412,000
    )Finance income recognized (2)
    
    
    31,749,000
    
    
    
    604,000
    
    
    
    32,353,000Balance, end of period
    
    $
    522,345,000
    
    
    $
    41,389,000
    
    
    $
    563,734,000Finance income as a percentage of collections
    
    
    43 7
    %
    
    
    17 0
    %
    
    
    42 5
    %
 
 (1)
    
    Represents a portfolio acquired during the three months ended December 31,2006 which the
Company successfully retuned to the seller at the original purchase value.(2)
    
    Includes approximately $500,000 derived from fully amortized interest method pools. Supplementary Information:
   -41-




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##### Table of Contents



Collections Represented by Account Sales
 CollectionsRepresented
    
    FinanceBy Account
    
    IncomePeriod
    
    Sales
    
    EarnedSix months ended March 31, 2008
    
    $
    12,654,000
    
    
    $
    5,179,000Three months ended March 31, 2008
    
    $
    4,863,000
    
    
    $
    2,826,000Six months ended March 31, 2007
    
    $
    31,001,000
    
    
    $
    14,514,000Three months ended March 31, 2007
    
    $
    13,919,000
    
    
    $
    5,555,000
 Portfolio Performance (1)
 Total estimatedCash Collections
    
    Estimated
    
    Total
    
    Collections as aPurchase
    
    Including Cash
    
    Remaining
    
    Estimated
    
    Percentage ofPurchase Period
    
    Price (2)
    
    Sales (3)
    
    Collections (4)
    
    Collections (5)
    
    Purchase Price2001
    
    $
    65,120,000
    
    
    $
    105,256,000
    
    
    
    
    
    
    $
    105,256,000
    
    
    
    162
    %2002
    
    
    36,557,000
    
    
    
    47,686,000
    
    
    
    
    
    
    
    47,686,000
    
    
    
    130
    %2003
    
    
    115,626,000
    
    
    
    198,438,000
    
    
    $
    3,666,000
    
    
    
    202,104,000
    
    
    
    175
    %2004
    
    
    103,743,000
    
    
    
    166,136,000
    
    
    
    6,408,000
    
    
    
    172,544,000
    
    
    
    166
    %2005
    
    
    126,023,000
    
    
    
    172,234,000
    
    
    
    51,321,000
    
    
    
    223,555,000
    
    
    
    177
    %2006
    
    
    200,237,000
    
    
    
    179,375,000
    
    
    
    131,263,000
    
    
    
    310,638,000
    
    
    
    155
    %2007
    
    
    384,850,000
    
    
    
    105,781,000
    
    
    
    433,507,000
    
    
    
    539,288,000
    
    
    
    140
    %2008
    
    
    20,155,000
    
    
    
    3,575,000
    
    
    
    23,892,000
    
    
    
    27,467,000
    
    
    
    136
    %
 
 (1)
    
    Total collections do not represent full collections of the Company with respect to this
or any other year.(2)
    
    Purchase price refers to the cash paid to a seller to acquire a portfolio less the
purchase price refunded by a seller due to the return of non-compliant accounts (also defined as
put-backs).(3)
    
    Net cash collections include: net collections from our third-party collection agencies
and attorneys, net collections from our in-house efforts and collections represented by account
sales.(4)
    
    Does not include estimated collections from portfolios that are zero bases.(5)
    
    Total estimated collections refers to the actual net cash collections, including cash
sales, plus estimated remaining net collections. -42-




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Recent Accounting Pronouncements
 Disclosures about Derivative Instruments and Hedging Activitiesan amendment of FASB Statement No.
133
  Share-Based Payment
 Noncontrolling Interests in
Consolidated Financial Statementsan amendment of ARB No. 51.
     -43-




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Business Combinations  Business
Combinations
           Application of Accounting Principles to Loan Commitments
 -44-




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Accounting for Derivative Instruments and Hedging Activities Accounting
for Servicing of Financial Assets The
Fair Value Option for Financial Assets and Financial Liabilities,
 The Fair Value Option for Financial
Assets and Financial Liabilities  Including an amendment of FASB Statement No. 115
 Employers Accounting for Defined
Benefit Pension and Other Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106
and 132(R)
 Fair Value Measurements
 Accounting for Uncertainty in
Income Taxes  an interpretation of FASB Statement No. 109
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  -45-




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Item 4. Controls and Procedures
 a. Disclosure Controls and Procedures.
  b. Changes in Internal Controls Over Financial Reporting.
  -46-




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PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  We have seen, at certain times, the environment for collections from debtors is slower and more
challenging.
   
    
    a slowdown in the economy;
    
    problems in the credit and housing markets;
    
    reductions in consumer spending;
    
    changes in the underwriting criteria by originators; and
    
    changes in laws and regulations governing consumer lending.
  Recent amendments to our credit facility increase our risk and potential loss.
  We rely on third parties to locate, identify and evaluate consumer receivable portfolios
available for purchase.
  -47-




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The Company has been required to amend its revolving credit facility on a number of occasions.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  AuthorityElection of Directors
    
    For
    
    WithheldGary Stern
    
    
    9,918,856
    
    
    
    2,659,453Arthur Stern
    
    
    9,904,348
    
    
    
    2,673,961Herman Badillo
    
    
    9,659,614
    
    
    
    2,918,695David Slackman
    
    
    9,937,396
    
    
    
    2,640,913Edward Celano
    
    
    9,715,007
    
    
    
    2,863,302Harvey Leibowitz
    
    
    9,704,283
    
    
    
    2,874,026Alan Rivera
    
    
    10,205,721
    
    
    
    2,372,588Louis A. Piccolo
    
    
    10,204,646
    
    
    
    2,373,663
 -48-




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##### Table of Contents



Item 5. Other Information
  
 Item 6. Exhibits
  10.1
    
    Third Amendment to the Receivables Financing Agreement10.2
    
    Amended and Restated Servicing Agreement dated May 12, 200831.1
    
    Certification of the Registrants Chief Executive Officer, Gary Stern, pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.31.2
    
    Certification of the Registrants Chief Financial Officer, Mitchell Cohen, pursuant
to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
    
    Certification of the Registrants Chief Executive Officer, Gary Stern, pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of the Registrants Chief Financial Officer, Mitchell Cohen, pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002.
 -49-




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ASTA FUNDING, INC.(Registrant)Date: May 19, 2008
    
    By: /s/ Gary SternGary Stern, President, Chief Executive Officer(Principal Executive Officer)Date: May 19, 2008
    
    By: /s/ Mitchell CohenMitchell Cohen, Chief Financial Officer(Principal Financial Officer andPrincipal Accounting Officer)
 -50-