<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                              Washington, DC 20549

                                  FORM 10-QSB/A

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the quarterly period ended June 30, 1997

                                       OR

[ ] 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.
                               ------------------
        (Exact name of small business issuer as specified in its charter)

             Delaware                                 22-3388607
             --------                                 ----------
(State or other jurisdiction of          (I.R.S. Employer Identification No.)
 incorporation or organization)


210 Sylvan Ave., Englewood Cliffs, New Jersey            07632
---------------------------------------------            -----
 (Address of principal executive offices)              (Zip Code)

Issuer's telephone number: (201) 567-5648

Former name, former address and former fiscal year, if changed since last 
report:  N/A

Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 X  No __

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court.
 Yes ____ No ____

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of June 30, 1997 the registrant
had 4,460,000 common shares outstanding.

Transitional Small Business Disclosure Format (check one): Yes __ No X


<PAGE>


                        Asta Funding, Inc. and Subsidiary
                           Form 10-QSB/A June 30, 1997


                                      INDEX



Part I.  Financial Information
------------------------------
         Item 1.  Financial Statements

                  Consolidated Balance Sheets as of  June 30, 1997 (Unaudited) 
                  and September 30, 1996

                  Consolidated Statements of Operations for the three-and nine-
                  month periods ended June 30, 1997 and June 30, 1996
                  (Unaudited)

                  Consolidated Statements of Cash Flows for the nine-month 
                  periods ended June 30, 1997 and June 30, 1996 (Unaudited)

                  Notes to consolidated financial statements (Unaudited)

         Item 2.  Management's Discussion and Analysis of Financial Condition 
                  and Results of  Operations


Part II.  Other Information
---------------------------

         Item 1.  Legal Proceedings

         Item 5.  Other Information

         Item 6.  Exhibits and Reports on Form 8-K


Signatures
<PAGE>




PART I - FINANCIAL INFORMATION

Item 1. Financial Statements


Asta Funding, Inc. and Subsidiary

Consolidated Balance Sheets
<TABLE>
<CAPTION>

                                                               June 30,                       September 30,
                                                                 1997                              1996
                                                           -----------------                -------------------
                                                            Unaudited
<S>                                                            <C>                               <C>
Assets
Cash                                                         $        5,007                     $    3,401,674
Restricted cash and cash equivalents, net                           878,760                            358,179
Loans receivable, net                                            16,265,244                          3,285,130
Accrued interest receivable                                         204,000                             36,168
Servicing fees receivable                                            34,069                             59,919
Excess servicing receivable, net                                  1,245,049                          2,675,407
Due from trustee                                                    106,585                          2,079,679
Furniture and equipment, net                                        157,886                             97,894
Repossessed automobiles, net                                        467,684                            491,314
Deferred taxes                                                      150,000                            365,000
Other assets                                                        254,775                            259,475
                                                           -----------------                -------------------
          Total Assets                                        $  19,769,059                     $   13,109,839
                                                           =================                ===================

Liabilities and Stockholders' Equity
Liabilities
Bank overdraft                                                $     201,986                     $       54,304
Income taxes payable                                                 51,123                          1,705,000
Estimated future losses on loans sold                                     -                             76,756
Accounts payable and accrued expenses                               348,995                            592,356
Advances under a line of credit                                  10,550,000                                  -
Due to parent                                                       419,440                          1,919,704
                                                           -----------------                -------------------
          Total Liabilities                                      11,571,544                          4,348,120
                                                           -----------------                -------------------


Stockholders' Equity
Common stock, $.01 par value; authorized
10,000,000 shares; issued and outstanding
4,460,000                                                            44,600                             44,600
Additional paid-in capital                                        9,597,271                          9,597,271
Accumulated deficit                                              (1,444,356)                          (880,152)
                                                           -----------------                -------------------
          Total Liabilities                                       8,197,515                          8,761,719
                                                           -----------------                -------------------
Total Liabilities and Stockholders' Equity                    $  19,769,059                     $   13,109,839
                                                           =================                ===================



</TABLE>



See accompanying notes to consolidated financial statements




<PAGE>

<TABLE>
<CAPTION>


Asta Funding, Inc. and Subsidiary

Consolidated Statements of Operations
Unaudited

                                                                 Three Months Ended                   Nine Months Ended
                                                                      June 30,                             June 30,
                                                        ---------------------------------       ---------------------------
                                                            1997                 1996               1997          1996
                                                        -------------       -------------       ------------- -------------

<S>                                                      <C>                   <C>              <C>                <C>
Revenues:
Interest                                                $  1,058,056        $  1,082,314        $  2,411,181  $  2,371,977
Servicing fees                                                45,122                   -             402,907             -
                                                        -------------       -------------       ------------- -------------
                                                           1,103,178           1,082,314           2,814,088     2,371,977
                                                        -------------       -------------       ------------- -------------

Expenses:
General and administrative                                   768,341             447,220           2,226,228       993,127
Provision for credit losses                                  587,000             130,500           1,206,700       388,900
Interest                                                     184,572             158,921             320,773       371,008
                                                        -------------       -------------       ------------- -------------
                                                           1,539,913             736,641           3,753,701     1,753,035
                                                        -------------       -------------       ------------- -------------
Income (loss) before provision (benefit) for
     income taxes                                       $   (436,735)       $    345,673        $   (939,613) $    618,942
Provision (benefit) for income taxes                        (173,460)            138,131            (375,410)      249,133

                                                        -------------       -------------       ------------- -------------
Net income (loss)                                       $   (263,275)       $    207,542        $   (564,203) $    369,809
                                                        =============       =============       ============= =============

Net income (loss) per share                             $      (0.07)       $       0.06        $      (0.14) $       0.11
                                                        =============       =============       ============= =============
Weighted average number of shares
      outstanding                                          3,960,000           3,629,712           3,960,000     3,371,259
                                                        -------------       -------------       ------------  -------------

                                                    
</TABLE>

<PAGE>


<TABLE>
<CAPTION>

Asta Funding, Inc. and Subsidiary

Consolidated Statements of Cash Flows
Unaudited                                                                    Nine Months Ended
                                                                                  March 31,
                                                                  -------------------------------------
                                                                       1997                     1996
                                                                       ----                     ---- 
<S>                                                                    <C>                         <C>
Cash flows from operating activities:
  Net income (loss)                                               $    (564,205)           $    369,809
  Adjustments to reconcile net income (loss) to net
    cash provided by (used in) operating activities:
    Depreciation and amortization                                        80,327                  89,066
    Amortization of excess servicing                                  1,397,206                       -
    Provision for losses                                              1,206,700                 388,900
    Deferred income taxes                                               215,000                (128,000)
    Expenses advanced by parent                                          75,660                  61,898
    Changes in operating assets and liabilities:
       Accrued interest receivable                                     (167,831)               (205,164)
       Servicing fees receivable                                         25,850                       -
       Other assets                                                      24,339                (234,982)
       Due from trustee                                               1,887,625                       -
       Restricted cash                                               (1,413,345)                      -
       Accounts payable and accrued expenses                         (1,897,227)                520,453
                                                                  -------------            ------------
           Net cash provided by operating activities                    870,099                 861,980

Cash flows from investing activities:
    Loans originated                                                (16,346,349)            (18,156,889)
    Loans repaid                                                      2,999,440               3,676,826
    Capital expenditures                                                (92,243)                (35,452)
                                                                  -------------            ------------
            Net cash used in investing activities                   (13,439,152)            (14,515,515)

Cash flows from financing activities:
    Payments to parent                                               (1,525,695)                (21,664)
    Increase in bank overdraft                                          147,681                 229,945
    Issuance of common stock                                                  -               5,699,371
    Deferred offering costs                                                   -                  97,631
    Advances under a line of credit                                  10,550,000               7,433,925
                                                                  -------------            ------------
            Net cash provided by financing activities                 9,171,986              13,439,208
                                                                  -------------            ------------

(Decrease) in cash                                                   (3,397,067)               (214,327)

Cash at the beginning of period                                       3,401,674                 214,391
                                                                  -------------            ------------
Cash at end of period                                             $       4,607            $         64
                                                                  =============            ============

Supplemental disclosure of cash flow information:
   Cash paid during the period
         Interest                                                 $     233,360            $    295,844
         Income taxes                                             $     900,000            $     26,250

</TABLE>

See accompanying notes to consolidated financial statements
<PAGE>





                               Asta Funding, Inc.
                   Notes to Consolidated Financial Statements

Note 1: Basis of  Presentation

Asta Funding, Inc. (the "Company") is a consumer finance company engaged in the
business of purchasing, selling and servicing retail installment sales contracts
("Contracts") originated by automobile dealers ("Dealers") in the sale primarily
of used automobiles. The Company was formed July 7, 1994. The Company's fiscal
year-end is September 30.

The consolidated balance sheet as of June 30, 1997, the consolidated statement
of operations for the three- and nine-month periods ended June 30, 1997 and
1996, and the consolidated statement of cash flows for the nine-month periods
ended June 30, 1997 and 1996, have been prepared by the Company without an
audit. In the opinion of management, all adjustments (which include only normal
recurring adjustments) necessary to present fairly the financial position at
June 30, 1997 and 1996, the results of operations for the three- and nine-month
periods ended June 30, 1996 and 1997 and the cash flows for the nine-month
periods ended June 30, 1996 and 1997 have been made. The results of operations
for the three- and nine-month periods ended June 30, 1997 are not necessarily
indicative of the operating results for the full year.

Pursuant to the rules and regulations of the Securities and Exchange Commission,
certain information and footnote disclosures required under generally accepted
accounting principles have been condensed or omitted from the presented
financial statements. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended September 30,
1996.

Note 2: Principles of Consolidation

The consolidated  financial  statements  include the accounts of Asta Funding, 
Inc. and its wholly-owned  subsidiary,  Asta Auto Receivables  Company,  a 
limited  purpose  corporation  formed to accommodate  certain  resales of 
Contracts by the Company.  Allsignificant intercompany balances and transactions
have been eliminated in consolidation.

Note 3: Loans Receivable

The Contracts which the Company purchases from dealers provide for finance
charges of between 16.95% and 29.9% per annum. Each Contract provides for full
amortization, equal monthly payments and permits prepayments by the borrower at
any time without penalty. The Company generally purchases Contracts at a
discount from the full amount financed under a Contract.

Note 4: Interest Income

Interest income on loans is recognized using the interest method. Accrual of
interest income on loans receivable is suspended when a loan is contractually
delinquent more than 60 days.

Note 5: Servicing Fees

Servicing fees are reported as income when earned, net of related amortization
of excess servicing fees. Servicing costs are charged to expense as incurred.

Note 6: Initial Public Offering

On November 17, 1995, the Company, in its initial public offering, sold
1,200,000 shares of its common stock. Proceeds, net of expenses of the offering,
were approximately $4,400,000. Additionally, the underwriter received warrants
to purchase shares of common stock at $6.50 per share. An additional 180,000
shares were sold on December 1, 1995 pursuant to the exercise by the underwriter
of the over-allotment option for approximately $800,000 net of expenses.
<PAGE>





                               Asta Funding, Inc.
       Item 2. Management's Discussion and Analysis of Financial Condition
                           and Results of Operations

Overview

The Company is engaged in the business of purchasing, selling and servicing
retail installment sales contracts ("Contracts") originated by automobile
dealers ("Dealers") in the sale primarily of used automobiles. The Company was
formed July 7, 1994 and purchased its first Contract in October 1994.

The Company typically purchases Contracts between Dealers and purchasers of
automobiles ("Sub-Prime Borrowers") who may have limited credit histories, low
incomes or past credit problems and, therefore, are generally unable to obtain
credit from traditional sources of automobile financing such as commercial
banks, savings and loan associations or credit unions. Sub-Prime Borrowers
typically pay a higher rate of interest than do prime borrowers utilizing
traditional financing sources.

The Company generates revenues, earnings and cash flow primarily through the
purchase and collection of principal, interest and other payments on Contracts.

Results of operations

The three-month period ended June 30, 1997, compared to the three-month period
------------------------------------------------------------------------------
ended June 30, 1996
-------------------
Revenues. During the three-month period ended June 30, 1997, revenues increased
by $20,864 compared to the three-month period ended June 30, 1996. Interest
income decreased by $24,258 compared to the three-month period ended June 30,
1996. The increase in revenue is due to the increase in the volume of Contracts
serviced by the Company. The decrease in interest income is primarily due to the
decrease in the average number of Contracts outstanding compared to the
three-month period ended June 30, 1996. During the three-month period ended June
30, 1997, the Company purchased 877 Contracts from Dealers, compared to 1,026 in
the three-month period ended June 30, 1996. The Company earned Servicing fees of
$45,122 for the three months ended June 30, 1997, which consisted of base and
excess monthly servicing fees on Contracts sold and serviced by the Company. The
Company completed its first sale and securitization of a portfolio of Contracts
in September 1996 and therefore it did not have any income from servicing fees
during the three-month period ended June 30, 1996.

Expenses. During the three-month period ended June 30, 1997, general and
administrative expenses increased by $321,141 compared to the three-month period
ended June 30, 1996. The increase is due to the hiring of additional employees
and the increased overhead expenses necessary to accommodate the Company's
increased volume of servicing Contracts. In addition, the Company has incurred
an increase in marketing expenses as compared to the three-month period ended
June 30, 1996.

Interest expense increased by $25,651 during the three-month period ended June
30, 1997 compared to the same period in the prior year and represented 12% of
total expenses for the three-month period ended June 30, 1997. The increase is
due to an increase in borrowings under the line of credit on the Company's
credit facility with BankAmerica Business Credit, Inc. ("BankAmerica").

During the three-month period ended June 30, 1997, the provision for losses on
Contracts purchased increased by $456,500 and represented 38% of total expenses
compared to the three-month period ended June 30, 1996. The increase is due to
management's evaluation of its loan loss reserves and higher than expected
losses on Contracts held and serviced by the Company.

The nine-month period ended June 30, 1997, compared to the nine-month period
----------------------------------------------------------------------------
ended June 30, 1996
-------------------
Revenues. During the nine-month period ended June 30, 1997, revenues increased
by $442,111 compared to the nine-month period ended June 30, 1996. Interest
income increased by $39,204 compared to the nine-month period ended June 30,
1996. The increase in revenue and interest income is primarily due to the
increase in the average number of Contracts outstanding compared to the
nine-month period ended June 30, 1996 . During the nine-month period ended June
30, 1997, the Company purchased 1,736 Contracts from Dealers, compared to 1,993
in the nine-month period ended June 30, 1996. The Company earned Servicing fees
of $402,907 for the nine months ended June 30, 1997 which consisted of base and
excess monthly servicing
<PAGE>


                               Asta Funding, Inc.
       Item 2. Management's Discussion and Analysis of Financial Condition
                           and Results of Operations


fees on Contracts sold and serviced by the Company. The Company completed its
first sale and securitization of a portfolio of Contracts in September 1996 and
therefore did not have income from servicing fees for the nine-month period
ended June 30, 1996.

Expenses. During the nine-month period ended June 30, 1997, operating expenses
increased by $2,000,666 as compared to the nine-month period ended June 30,
1996. The increase is due to the addition of employees and increased overhead
expenses necessary to accommodate the Company's increased volume of servicing
Contracts. In addition, the Company has incurred an increase in marketing
expenses as compared to the nine-month period ended June 30, 1996.

Interest expense decreased by $50,235 during the nine-month period ended June
30, 1997 compared to the same period in the prior year and represented 9% of
total expenses for the nine-month period ended June 30, 1997. The decrease is
due to a decrease in borrowings under the line of credit on the Company's credit
facility with BankAmerica.

During the nine-month period ended June 30, 1997, the provision for losses on
Contracts purchased increased by $817,800 and represented 32% of total expenses
compared to the nine-month period ended June 30, 1997. The increase is due to
management's evaluation of its loan loss reserves and higher than previously
expected losses on Contracts held and serviced by the Company.

Liquidity and Capital Resources

The funds necessary to support the Company's purchasing of Contracts have been
provided primarily from its initial public offering, bank borrowings under a
line of credit and contributed capital from Asta Group, Incorporated, an
affiliate of the Company.

In November 1995, the Company entered into a two-year credit facility with
BankAmerica (the "Credit Facility") under which the Company can borrow the
lesser of the advance rate (between 70% and 80% of eligible loans receivable)
and $15 million. At June 30, 1997, advances under the Credit Facility aggregated
$10,550,000. The advances bear interest at the prime rate plus 1%.

The Company's cash requirements have been and will continue to be significant.
Pursuant to the terms of the securitization agreement between Greenwich Capital
Markets, Inc. and Asta Funding, Inc., entered into in September 1996, the
Company was required to make a significant initial cash deposit, for purposes of
credit enhancement, to a spread account (the "Spread Account"). The Spread
Account is pledged to support the related Asset Backed Securities ("ABS"), and
is invested in high quality liquid securities. Excess cash flows from the
securitized Contracts are required to be deposited into the Spread Account until
such time as the Spread Account balance reaches a specific percent of the
outstanding balance of the related ABS.

The Company anticipates the funds available under the Credit Facility, the
proceeds from the sale of Contracts and cash from operations will be sufficient
to satisfy the Company's estimated cash requirements for the next 12 months,
assuming that the Company continues to have a means by which to sell its
warehoused Contracts. If for any reason the Company is unable to sell its
Contracts, or if the Company's available cash otherwise proves to be
insufficient to fund operations (because of future changes in the industry,
general economic conditions, unanticipated increases in expenses, or other
factors), the Company may be required to seek additional funding.

The Company does not anticipate any need for significant capital expenditures in
connection with the expansion of its business for at least 12 months.

This Form 10-QSB/A contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Such statements include but are not
limited to , the Company's opportunities to increase revenues through, among
other things, the purchase and sale of additional Contracts, and the anticipated
need and availability of financing.
<PAGE>



                        Asta Funding, Inc. and Subsidiary
       Item 2. Management's Discussion and Analysis of Financial Condition
                           and Results of Operations


Forward-looking statements are inherently subject to risks and uncertainties,
many of which cannot be predicted with accuracy and some of which might not even
be anticipated. Future events and actual results, financial and otherwise, could
differ materially from those set forth in or contemplated by the forward-looking
statements herein. Important factors that could contribute to such differences
are: increases in unemployment or other changes in domestic economic conditions
which adversely affect the sales of new and used automobiles and which may
result in increased delinquencies, foreclosures and losses on Contracts; adverse
economic conditions in geographic areas in which the Company's business is
concentrated, mainly the Northeast and Mid-Atlantic States; changes in interest
rates, adverse changes in the market for securitized receivables pools or a
substantial lengthening of the Company's warehousing each of which could
restrict the Company's ability to obtain cash for Contract origination and
purchases; increases in the amounts required to be set aside in spread accounts
or to be expended for other forms of credit enhancement to support future
securitizations; increased competition; a reduction in the number and amount of
acceptable Contracts submitted to the Company by its dealers; changes in
government regulations effecting consumer credit; and other risk factors
identified in the Company's filings with the Securities and Exchange Commission,
including under the caption "Risk Factors" in its most recent Registration
Statement on Form S-1. Subsequent, written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified by the precautionary statements in this paragraph and elsewhere in
this Form 10-QSB/A.
<PAGE>



                        Asta Funding, Inc. and Subsidiary
                           Form 10-QSB/A June 30, 1997


Part II. OTHER INFORMATION


Item 1.  Legal Proceedings

         As of the date of this Filing, the Company was not involved in any
material litigation in which it is the defendant. The Company regularly
initiates legal proceedings as a plaintiff in connection with its routine
collection activities.

Item 5.  Other Information

    
         On August 15, 1997, Asta Group Incorporated, formerly the majority
shareholder of the Company, sold all of the shares of the Company's Common Stock
it beneficially owned to the shareholders of Asta Group Incorporated and
Mitchell Herman, the Chief Financial Officer of the Company.
     

         On July 30, 1997, the Company and its wholly-owned subsidiary, Asta
Auto Receivables Company ("Asta Receivables") consummated a securitization of
automobile loan receivables. The transaction involved the private placement by
Asta Receivables of pass-through certificates evidencing ownership interests in
a trust. The assets of the trust are primarily comprised of motor vehicle retail
installment sale Contracts having an aggregate principal balance of $15,839,988
as of July 1, 1997. The contracts were transferred by the Company to Asta
Receivables which subsequently transferred such assets to the trust. The Company
received net proceeds of $13,427,428 from the sale of the Contracts to Asta
Receivables.

Item 6.  Exhibits and Reports on Form 8-K

         a. Exhibits

         Exhibit
         Number
         ------

        
         10.1 Pooling and Servicing Agreement dated as of July 1, 1997 among
Asta Auto Receivables Company, the Company and The Chase Manhattan Bank. *

         10.2.    Certificate  Purchase  Agreement  dated July 30, 1997 between
Greenwich  Capital  Markets,  Inc. and Asta Auto Receivables Company. *

         10.3.    Purchase Agreement dated as of July 1, 1997 between Asta Auto
Receivables Company and the Company. *

         27       Financial Data Schedule *

         * Incorporated by reference to the similar numbered exhibits in the
registrant's form 10-QSB filed on August 7, 1997.
     

         b.  Reports on Form 8-K filed during the quarter ended June 30,
1997-None.


<PAGE>







                        Asta Funding, Inc. and Subsidiary
                           Form 10-QSB/A June 30, 1997


Signatures
----------
In accordance with the requirements of the Exchange Act of 1934, the Registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

                               ASTA FUNDING, INC.
                               (Registrant)


Date: August 19, 1997          By: /s/ Gary Stern
                                   ----------------------------------    
                                   Gary Stern, President, 
                                   Chief Executive Officer
                                   (Principal Executive Officer)


Date: August 19, 1997          By: /s/ Mitchell Herman
                                   ----------------------------------    
                                   Mitchell Herman,              
                                   Chief Financial Officer
                                   (Principal Financial Officer and 
                                   Principal Accounting Officer)