##### 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, 2009
 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
    
    (IRS Employerof incorporation or organization)
    
    Identification No.)210 Sylvan Ave., Englewood Cliffs, New Jersey
    
    07632(Address of principal executive offices)
    
    (Zip Code)
 Registrants telephone number: (201) 567-5648
  þ o
 Yes o No o
   Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer filer o
Do not check if a smaller reporting company)
    
    Smaller reporting company o
 o þ




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##### 



ASTA FUNDING, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
 Part I. Financial Information
    
    
    3Item 1. Financial Statements
    
    
    3Condensed Consolidated Balance Sheets as of March 31, 2009 (unaudited) and September 30, 2008
    
    
    3Condensed Consolidated Statements of Operations for the three and six month periods ended March 31, 2009 and 2008 (unaudited)
    
    
    4Condensed Consolidated Statement of Stockholders Equity for the six month period ended March 31, 2009 (unaudited)
    
    
    5Condensed Consolidated Statements of Cash Flows for the six month periods ended March 31, 2009 and 2008 (unaudited)
    
    
    6Notes to Condensed Consolidated Financial Statements (unaudited)
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    37Item 4. Controls and Procedures
    
    
    37Part II. Other Information
    
    
    38Item 1. Legal Proceedings
    
    
    38Item 1A Risk Factors
    
    
    38Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
    
    
    38Item 3. Defaults Upon Senior Securities
    
    
    38Item 4. Submission of Matters to a Vote of Security Holders
    
    
    38Item 5. Other Information
    
    
    38Item 6. Exhibits
    
    
    39Signatures
    
    
    40Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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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 30,2009
    
    
    2008(Unaudited)ASSETSCash and cash equivalents
    
    $
    2,635,000
    
    
    $
    3,623,000Restricted cash
    
    
    2,736,000
    
    
    
    3,047,000Consumer receivables acquired for liquidation (at net realizable value)
    
    
    368,223,000
    
    
    
    449,012,000Due from third party collection agencies and attorneys
    
    
    3,723,000
    
    
    
    5,070,000Income taxes receivable
    
    
    954,000
    
    
    
    Investment in venture
    
    
    187,000
    
    
    
    555,000Furniture and equipment, net
    
    
    596,000
    
    
    
    762,000Deferred income taxes
    
    
    23,917,000
    
    
    
    15,567,000Other assets
    
    
    3,265,000
    
    
    
    3,500,000Total assets
    
    $
    406,236,000
    
    
    $
    481,136,000LIABILITIES AND STOCKHOLDERS EQUITYLiabilitiesDebt
    
    $
    160,084,000
    
    
    $
    213,485,000Subordinated debt  related party
    
    
    8,246,000
    
    
    
    8,246,000Other liabilities
    
    
    2,931,000
    
    
    
    4,618,000Dividends payable
    
    
    285,000
    
    
    
    571,000Income taxes payable
    
    
    393,000
    
    
    
    6,315,000Total liabilities
    
    
    171,939,000
    
    
    
    233,235,000Commitments and contingenciesStockholders 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  14,271,824 at March 31, 2009 and 14,276,158 at
September 30, 2008
    
    
    143,000
    
    
    
    143,000Additional paid-in capital
    
    
    69,853,000
    
    
    
    69,130,000Accumulated other comprehensive loss
    
    
    (1,048,000
    )
    
    
    (297,000
    )Retained earnings
    
    
    165,349,000
    
    
    
    178,925,000Total stockholders equity
    
    
    234,297,000
    
    
    
    247,901,000Total liabilities and stockholders equity
    
    $
    406,236,000
    
    
    $
    481,136,000
   3




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ASTA FUNDING, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 Three Months
    
    
    Three Months
    
    
    Six Months
    
    
    Six MonthsEnded
    
    
    Ended
    
    
    Ended
    
    
    EndedMarch 31, 2009
    
    
    March 31, 2008
    
    
    March 31, 2009
    
    
    March 31, 2008Revenues:Finance income, net
    
    $
    18,104,000
    
    
    $
    33,878,000
    
    
    $
    36,520,000
    
    
    $
    68,013,000Other income
    
    
    22,000
    
    
    
    4,000
    
    
    
    54,000
    
    
    
    144,00018,126,000
    
    
    
    33,882,000
    
    
    
    36,574,000
    
    
    
    68,157,000Expenses:General and administrative
    
    
    6,345,000
    
    
    
    7,124,000
    
    
    
    13,372,000
    
    
    
    12,929,000Interest (fiscal year 2009 
Related party
 Period ended March 31, 2009 
Three months, $128,000;
Six months, $256,000)
    
    
    1,954,000
    
    
    
    4,711,000
    
    
    
    5,124,000
    
    
    
    10,652,000Impairments
    
    
    18,429,000
    
    
    
    35,000,000
    
    
    
    39,844,000
    
    
    
    35,000,00026,728,000
    
    
    
    46,835,000
    
    
    
    58,340,000
    
    
    
    58,581,000(Loss) income before equity in
loss of venture and income tax
    
    
    (8,602,000
    )
    
    
    (12,953,000
    )
    
    
    (21,766,000
    )
    
    
    9,576,000Equity in loss of venture
    
    
    (72,000
    )
    
    
    (1,000
    )
    
    
    (55,000
    )
    
    
    (78,000
    )(Loss) income before income tax
(benefit)
    
    
    (8,674,000
    )
    
    
    (12,954,000
    )
    
    
    (21,821,000
    )
    
    
    9,498,000Income tax (benefit) expense
    
    
    (3,506,000
    )
    
    
    (5,247,000
    )
    
    
    (8,816,000
    )
    
    
    3,891,000Net (loss) Income
    
    $
    (5,168,000
    )
    
    $
    (7,707,000
    )
    
    $
    (13,005,000
    )
    
    $
    5,607,000Net (loss) income per share:Basic
    
    $
    (0.36
    )
    
    $
    (0.54
    )
    
    $
    (0.91
    )
    
    $
    0.40Diluted
    
    $
    (0.36
    )
    
    $
    (0.54
    )
    
    $
    (0.91
    )
    
    $
    0.38Weighted average number of common shares outstanding:Basic
    
    
    14,271,824
    
    
    
    14,201,674
    
    
    
    14,271,824
    
    
    
    14,059,142Diluted
    
    
    14,271,824
    
    
    
    14,201,674
    
    
    
    14,271,824
    
    
    
    14,742,549
   4




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##### Table of Contents



ASTA FUNDING, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
 (Unaudited)
 AccumulatedAdditional
    
    
    
    
    
    
    OtherPaid-in
    
    
    Retained
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Capital
    
    
    Earnings
    
    
    Income
    
    
    TotalBalance, September 30, 2008
    
    
    14,276,158
    
    
    $
    143,000
    
    
    $
    69,130,000
    
    
    $
    178,925,000
    
    
    $
    (297,000
    )
    
    $
    247,901,000Stock based compensation
expense
    
    
    
    
    
    
    
    
    
    
    649,000
    
    
    
    
    
    
    
    
    
    
    
    649,000Restricted shares forfeited
    
    
    (4,334
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tax benefit arising from
exercise of non- qualified
stock options
    
    
    
    
    
    
    
    
    
    
    74,000
    
    
    
    
    
    
    
    
    
    
    
    74,000Dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (571,000
    )
    
    
    
    
    
    
    (571,000
    )Other comprehensive loss,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (751,000
    )
    
    
    (751,000
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13,005,000
    )
    
    
    
    
    
    
    (13,005,000
    )Balance, March 31, 2009
    
    
    14,271,824
    
    
    $
    143,000
    
    
    $
    69,853,000
    
    
    $
    165,349,000
    
    
    $
    (1,048,000
    )
    
    $
    234,297,000
  Six Months
    
    
    Six MonthsEnded
    
    
    EndedMarch 31, 2009
    
    
    March 31, 2008Net (loss) income
    
    $
    (13,005,000
    )
    
    $
    5,607,000Other comprehensive loss,
Net of tax  Foreign
Currency translation
    
    
    (751,000
    )
    
    
    Comprehensive (loss) income
    
    $
    (13,756,000
    )
    
    $
    5,607,000
   5




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ASTA FUNDING, INC. AND SUBSIDIARIES
 
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)
 Six Months Ended
    
    
    Six Months EndedMarch 31, 2009
    
    
    March 31, 2008Cash flows from operating activities:Net (loss) income
    
    $
    (13,005,000
    )
    
    $
    5,607,000Adjustments to reconcile net income to net cash provided by operating
activities:Depreciation and amortization
    
    
    803,000
    
    
    
    549,000Deferred income taxes
    
    
    (8,350,000
    )
    
    
    (10,116,000
    )Impairments of consumer receivables acquired for liquidation
    
    
    39,844,000
    
    
    
    35,000,000Stock based compensation
    
    
    649,000
    
    
    
    450,000Changes in:Due from third party collection agencies and attorneys
    
    
    1,347,000
    
    
    
    (302,000
    )Income taxes receivable and income taxes payable
    
    
    (6,876,000
    )
    
    
    3,236,000Other assets
    
    
    (369,000
    )
    
    
    (361,000
    )Other liabilities
    
    
    (2,473,000
    )
    
    
    (3,978,000
    )Net cash provided by operating activities
    
    
    11,570,000
    
    
    
    30,085,000Cash flows from investing activities:Purchase of consumer receivables acquired for liquidation
    
    
    (2,688,000
    )
    
    
    (41,307,000
    )Principal collected on receivables acquired for liquidation
    
    
    37,587,000
    
    
    
    32,199,000Principal collected on receivable accounts represented by account sales
    
    
    4,856,000
    
    
    
    7,475,000Foreign exchange effect on receivables acquired for liquidation
    
    
    1,185,000
    
    
    
    Cash distributions received from venture
    
    
    368,000
    
    
    
    878,000Capital expenditures
    
    
    (34,000
    )
    
    
    (155,000
    )Net cash provided by (used in) investing activities
    
    
    41,274,000
    
    
    
    (910,000
    )Cash flows from financing activities:Proceeds from exercise of options
    
    
    
    
    
    
    425,000Tax benefit arising from non-qualified options
    
    
    74,000
    
    
    
    2,541,000Change in restricted cash
    
    
    311,000
    
    
    
    646,000Dividends paid
    
    
    (856,000
    )
    
    
    (1,114,000
    )Repayments of debt, net
    
    
    (53,423,000
    )
    
    
    (32,609,000
    )Net cash used in financing activities
    
    
    (53,894,000
    )
    
    
    (30,111,000
    )Decrease in cash
    
    
    (1,050,000
    )
    
    
    (936,000
    )Effect of foreign exchange on cash
    
    
    62,000
    
    
    
    Cash at the beginning of period
    
    
    3,623,000
    
    
    
    4,525,000Cash at end of period
    
    $
    2,635,000
    
    
    $
    3,589,000Supplemental disclosure of cash flow information:Cash paid during the periodInterest (fiscal year 2009 Related party  $256,000)
    
    $
    5,601,000
    
    
    $
    10,836,000Income taxes
    
    $
    5,814,000
    
    
    $
    8,198,000
   6




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ASTA FUNDING, INC. AND SUBSIDIARIES
 
 NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1: Business and Basis of Presentation
 Business
  Basis of Presentation
     7




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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
  Share-Based Payment
 The Fair Value Option for Financial Assets
and Financial Liabilities
    Fair Value Measurements
 Reclassifications
   8




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 2: Principles of Consolidation
  Note 3: Consumer Receivables Acquired for Liquidation
  
    
    the interest method; or
    
    the cost recovery method.
       9




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
  
    
    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, telecommunication, 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;
    
    time 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 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 timely customer statements from the original issuer.
   10




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
  For the Six Months Ended March 31, 2009Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    203,470,000
    
    
    $
    245,542,000
    
    
    $
    449,012,000Acquisitions of receivable portfolios, net
    
    
    2,681,000
    
    
    
    7,000
    
    
    
    2,688,000Net cash collections from collection of consumer
receivables acquired for liquidation
    
    
    (51,463,000
    )
    
    
    (20,853,000
    )
    
    
    (72,316,000
    )Net cash collections represented by account sales of
consumer receivables acquired for liquidation
    
    
    (3,075,000
    )
    
    
    (3,572,000
    )
    
    
    (6,647,000
    )Transfer to cost recovery
    
    
    (10,128,000
    )
    
    
    10,128,000
    
    
    
    Impairments
    
    
    (39,844,000
    )
    
    
    
    
    
    
    (39,844,000
    )Effect of foreign currency translation
    
    
    
    
    
    
    (1,190,000
    )
    
    
    (1,190,000
    )Finance income recognized (1)
    
    
    35,856,000
    
    
    
    664,000
    
    
    
    36,520,000Balance, end of period
    
    $
    137,497,000
    
    
    $
    230,726,000
    
    
    $
    368,223,000Finance income as a percentage of collections
    
    
    65.7
    %
    
    
    2.7
    %
    
    
    46.2
    %
 (1)
    
    Includes $20.6 million derived from fully amortized interest method pools. 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.  11




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 For the Three Months Ended March 31, 2009Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    166,432,000
    
    
    $
    237,376,000
    
    
    $
    403,808,000Acquisitions of receivable portfolios, net
    
    
    1,603,000
    
    
    
    7,000
    
    
    
    1,610,000Net cash collections from collections of
consumer receivables acquired for
liquidation
    
    
    (25,090,000
    )
    
    
    (10,971,000
    )
    
    
    (36,061,000
    )Net cash collections represented by account
sales of consumer receivables acquired for
liquidation
    
    
    (727,000
    )
    
    
    (147,000
    )
    
    
    (874,000
    )Transfer to cost recovery
    
    
    (3,979,000
    )
    
    
    3,979,000
    
    
    
    Impairments
    
    
    (18,429,000
    )
    
    
    
    
    
    
    (18,429,000
    )Effect of foreign currency translation
    
    
    
    
    
    
    65,000
    
    
    
    65,000Finance income recognized (1)
    
    
    17,687,000
    
    
    
    417,000
    
    
    
    18,104,000Balance, end of period
    
    $
    137,497,000
    
    
    $
    230,726,000
    
    
    $
    368,223,000Finance income as a percentage of collections
    
    
    68.5
    %
    
    
    3.8
    %
    
    
    49.0
    %
 (1)
    
    Includes approximately $10.5 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.  12




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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 )
  September 30, 2009 (six months ending)
    
    $
    23,969,000September 30, 2010
    
    
    55,441,000September 30, 2011
    
    
    30,869,000September 30, 2012
    
    
    19,710,000September 30, 2013
    
    
    9,008,000September 30, 2014
    
    
    636,000September 30, 2015
    
    
    148,000Total
    
    
    139,781,000Deferred revenue
    
    
    (2,284,000
    )Total
    
    $
    137,497,000
  Six Months
    
    
    Six MonthsEnded
    
    
    EndedMarch 31, 2009
    
    
    March 31, 2008Balance at beginning of period
    
    $
    58,134,000
    
    
    $
    176,615,000Income recognized on finance receivables, net
    
    
    (35,856,000
    )
    
    
    (47,049,000
    )Additions representing expected revenue from purchases
    
    
    902,000
    
    
    
    7,322,000Transfers to cost recovery
    
    
    (3,372,000
    )
    
    
    Reclassifications from nonaccretable difference
    
    
    28,263,000
    
    
    
    52,546,000Balance at end of period
    
    $
    48,071,000
    
    
    $
    189,434,000
  13




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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 )
 Three Months
    
    
    Three MonthsEnded
    
    
    EndedMarch 31, 2009
    
    
    March 31, 2008Balance at beginning of period
    
    $
    53,952,000
    
    
    $
    172,690,000Income recognized on finance receivables, net
    
    
    (17,687,000
    )
    
    
    (23,098,000
    )Additions representing expected revenue from purchases
    
    
    493,000
    
    
    
    115,000Transfers to cost recovery
    
    
    (895,000
    )
    
    
    Reclassifications from nonaccretable difference
    
    
    12,208,000
    
    
    
    39,727,000Balance at end of period
    
    $
    48,071,000
    
    
    $
    189,434,000
     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 Six Months Ended March 31,2009
    
    
    2008Gross collections (1)
    
    $
    123,225,000
    
    
    $
    176,688,000Commissions and fees (2)
    
    
    44,262,000
    
    
    
    69,001,000Net collections
    
    $
    78,963,000
    
    
    $
    107,687,000
 For the Three Months Ended March 31,2009
    
    
    2008Gross collections (1)
    
    $
    57,402,000
    
    
    $
    87,432,000Commissions and fees (2)
    
    
    20,467,000
    
    
    
    37,638,000Net collections
    
    $
    36,935,000
    
    
    $
    49,794,000
 (1)
    
    Gross collections include: collections by third-party collection
agencies and attorneys, collections from our internal efforts and
collections represented by account sales. In the first quarter of
fiscal year 2008, the Company returned a portfolio to the seller in
the amount of $2.8 million, which is included in the three- and
six-month periods ended March 31, 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 substantially all gross collections received by the Company in
connection with the Portfolio Purchase. Note 4: Acquisition
   15




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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 30,2009
    
    
    2008Furniture
    
    $
    310,000
    
    
    $
    310,000Leasehold improvements
    
    
    86,000
    
    
    
    105,000Equipment
    
    
    2,747,000
    
    
    
    2,714,0003,143,000
    
    
    
    3,129,000Less accumulated depreciation
    
    
    2,547,000
    
    
    
    2,367,000Balance, end of period
    
    $
    596,000
    
    
    $
    762,000
 Note 6: Debt and Subordinated Debt  Related Party
     16




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 6: Debt and Subordinated Debt  Related Party (continued)
         17




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 6: Debt and Subordinated Debt  Related Party (continued)
       18




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 Note 6: Debt and Subordinated Debt  Related Party (continued)
  March 31, 2009Stated
    
    
    AverageMarch 31,
    
    
    September 30,
    
    
    Interest
    
    
    Interest2009
    
    
    2008
    
    
    Rate
    
    
    Rate (1)Credit Facility
    
    $
    44,778,000
    
    
    $
    84,934,000
    
    
    
    5.00
    %
    
    
    4.11
    %Receivables Financing Agreement
    
    
    115,306,000
    
    
    
    128,551,000
    
    
    
    4.08
    %
    
    
    5.65
    %Total debt
    
    $
    160,084,000
    
    
    $
    213,485,000
    
    
    
    n/a
    
    
    
    5.11
    %Subordinated debt  related party
    
    $
    8,246,000
    
    
    $
    8,246,000
    
    
    
    6.25
    %
    
    
    6.25
    %
 (1)
    
    6-month average Note 7: Commitments and Contingencies
 Employment Agreements
  Leases
  Litigation
   19




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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 to
collect receivables and we factor in both better and worse 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 appropriate for
our law 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;
  20




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##### Table of Contents




    
    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;
    
    past history and performance of similar assets acquired. As we purchase
portfolios of like assets, we accumulate a significant historical data
base 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. We believe that debtors with jobs or property are more
likely to repay because courts have mandated the debtor must pay the debt.
Ultimately, the debtor will pay to clear title or release a lien. We also
believe that these debtors generally might take longer to repay and that
is factored into our initial expected cash flows; and
    
    credit standards of issuer.
    Commissions and fees
  Note 9: Income Taxes
   21




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 10: Net Income Per Share
   Six Months Ended March 31,2009
    
    
    2008Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedNet
    
    
    Average
    
    
    Per Share
    
    
    Net
    
    
    Average
    
    
    Per ShareIncome
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    AmountBasic
    
    $
    (13,005,000
    )
    
    
    14,271,824
    
    
    $
    (0.91
    )
    
    $
    5,607,000
    
    
    
    14,059,142
    
    
    $
    0.40Effect of Dilutive
Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    683,407Diluted
    
    $
    (13,005,0000
    )
    
    
    14,271,824
    
    
    $
    (0.91
    )
    
    $
    5,607,000
    
    
    
    14,742,549
    
    
    $
    0.38
 Three Months Ended March 31,2009
    
    
    2008Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedNet
    
    
    Average
    
    
    Per Share
    
    
    Net
    
    
    Average
    
    
    Per Share(Loss)
    
    
    Shares
    
    
    Amount
    
    
    Income
    
    
    Shares
    
    
    AmountBasic
    
    $
    (5,168,000
    )
    
    
    14,271,824
    
    
    $
    (0.36
    )
    
    $
    (7,707,000
    )
    
    
    14,201,674
    
    
    $
    (0.54
    )Effect of Dilutive
Stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted
    
    $
    (5,168,000
    )
    
    
    14,271,824
    
    
    $
    (0.36
    )
    
    $
    (7,707,000
    )
    
    
    14,201,674
    
    
    $
    (0.54
    )
  Note 11: Stock-based Compensation
     22




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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
 Equity Compensation Plan
     2002 Stock Option Plan
     23




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ASTA FUNDING, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  Continued  (Unaudited)
 Note 12: Stock Option Plans (continued)
 1995 Stock Option Plan
     Six Months Ended March 31,2009
    
    
    2008Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding options at the beginning of period
    
    
    1,037,438
    
    
    $
    11.69
    
    
    
    1,337,438
    
    
    $
    9.38Options granted
    
    
    -0-
    
    
    $
    -0-
    
    
    
    -0-
    
    
    $
    -0-Options exercised
    
    
    -0-
    
    
    $
    -0-
    
    
    
    (300,000
    )
    
    $
    1.42Options forfeited
    
    
    (1,000
    )
    
    $
    28.75
    
    
    
    -0-
    
    
    
    -0-Outstanding options at the end of period
    
    
    1,036,438
    
    
    $
    11.68
    
    
    
    1,037,438
    
    
    $
    11.69Exercisable options at the end of period
    
    
    1,036,438
    
    
    $
    11.68
    
    
    
    1,031,438
    
    
    $
    11.59
  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
    
    
    
    1.5
    
    
    $
    2.63
    
    
    
    300,000
    
    
    $
    2.63$2.8751  $5.7500
    
    
    106,667
    
    
    
    3.6
    
    
    $
    4.73
    
    
    
    106,667
    
    
    $
    4.73$5.7501  $8.6250
    
    
    12,000
    
    
    
    2.6
    
    
    $
    5.96
    
    
    
    12,000
    
    
    $
    5.96$14.3751  $17.2500
    
    
    218,611
    
    
    
    4.7
    
    
    $
    15.04
    
    
    
    218,611
    
    
    $
    15.04$17.2501  $20.1250
    
    
    382,160
    
    
    
    5.5
    
    
    $
    18.22
    
    
    
    382,160
    
    
    $
    18.22$25.8751  $28.7500
    
    
    17,000
    
    
    
    7.7
    
    
    $
    28.75
    
    
    
    17,000
    
    
    $
    28.751,036,438
    
    
    
    4.0
    
    
    $
    11.68
    
    
    
    1,036,438
    
    
    $
    11.68
   24




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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 31,2009
    
    
    2008Weighted
    
    
    
    
    
    
    WeightedAverage Grant
    
    
    
    
    
    
    Average GrantDate Fair
    
    
    
    
    
    
    Date FairShares
    
    
    Value
    
    
    Shares
    
    
    ValueUnvested at the beginning of period
    
    
    80,667
    
    
    $
    22.26
    
    
    
    45,333
    
    
    $
    28.75Awards granted
    
    
    
    
    
    
    
    
    
    
    58,000
    
    
    $
    19.73Vested
    
    
    (40,995
    )
    
    $
    24.50
    
    
    
    (22,666
    )
    
    $
    28.75Forfeited
    
    
    (4,334
    )
    
    $
    21.81
    
    
    
    
    
    
    
    Unvested at the end of period
    
    
    35,338
    
    
    $
    19.73
    
    
    
    80,667
    
    
    $
    22.26
  Note 13: Stockholders Equity
   25




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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Caution Regarding Forward Looking Statements
  www.astafunding.com. www.sec.gov
 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.
  26




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##### Table of Contents



Critical Accounting Policies
  
    
    the interest method; or
    
    the cost recovery method.
    
    
    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, telecommunications, etc.)
  
    
    the number of collection agencies previously attempting to collect the receivables in the portfolio;
    
    the average balance of the receivables;
    
    the age of the receivables (as older receivables might be more difficult to collect or might be
less cost effective);
    
    past history of performance of similar assets  as we purchase portfolios of similar assets, we
believe we have built significant history on how these receivables will liquidate and cash flow;
    
    number of months since charge-off;
    
    payments made since charge-off;
  27




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##### Table of Contents




    
    the credit originator and their credit guidelines;
    
    the locations of the debtors as there are better states to attempt to collect in and ultimately we
have better predictability of the liquidations and the expected cash flows. Conversely, there are
also states where the liquidation rates are not as good and that is factored into our cash flow
analysis;
    
    financial wherewithal of the seller;
    
    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.
       28




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##### Table of Contents



Results of Operations
 The six-month period ended March 31, 2009, compared to the six-month period ended
March 31, 2008
 Finance income
    Other income .
 General and Administrative Expenses
  29




---



##### Table of Contents



Interest Expense.
 Impairments.
 The three-month period ended March 31, 2009, compared to the three-month period ended
March 31, 2008
 Finance income
    Other income .
 General and Administrative Expenses
  30




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##### Table of Contents



Interest Expense.
 Impairments.
 Liquidity and Capital Resources
       31




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32




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33




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For the Six Months Ended March 31, 2009Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    203,470,000
    
    
    $
    245,542,000
    
    
    $
    449,012,000Acquisitions of receivable portfolios, net
    
    
    2,681,000
    
    
    
    7,000
    
    
    
    2,688,000Net cash collections from collection of consumer
receivables acquired for liquidation
    
    
    (51,463,000
    )
    
    
    (20,853,000
    )
    
    
    (72,316,000
    )Net cash collections represented by account sales of
consumer receivables acquired for liquidation
    
    
    (3,075,000
    )
    
    
    (3,572,000
    )
    
    
    (6,647,000
    )Transfer to cost recovery
    
    
    (10,128,000
    )
    
    
    10,128,000
    
    
    
    Impairments
    
    
    (39,844,000
    )
    
    
    
    
    
    
    (39,844,000
    )Effect of foreign currency translation
    
    
    
    
    
    
    (1,190,000
    )
    
    
    (1,190,000
    )Finance income recognized (1)
    
    
    35,856,000
    
    
    
    664,000
    
    
    
    36,520,000Balance, end of period
    
    $
    137,497,000
    
    
    $
    230,726,000
    
    
    $
    368,223,000Finance income as a percentage of collections
    
    
    65.7
    %
    
    
    2.7
    %
    
    
    46.2
    %
 (1)
    
    Includes $20.6 million derived from fully amortized interest method pools. 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
    
    
    (87,703,000
    )
    
    
    (7,330,000
    )
    
    
    (95,033,000
    )Net cash collections represented by account
sales of consumer receivables acquired for
liquidation (1)
    
    
    (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.  34




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For the Three Months Ended March 31, 2009Accrual
    
    
    CashBasis
    
    
    BasisPortfolios
    
    
    Portfolios
    
    
    TotalBalance, beginning of period
    
    $
    166,432,000
    
    
    $
    237,376,000
    
    
    $
    403,808,000Acquisitions of receivable portfolios, net
    
    
    1,603,000
    
    
    
    7,000
    
    
    
    1,610,000Net cash collections from collections of
consumer receivables acquired for
liquidation
    
    
    (25,090,000
    )
    
    
    (10,971,000
    )
    
    
    (36,061,000
    )Net cash collections represented by account
sales of consumer receivables acquired for
liquidation
    
    
    (727,000
    )
    
    
    (147,000
    )
    
    
    (874,000
    )Transfer to cost recovery
    
    
    (3,979,000
    )
    
    
    3,979,000
    
    
    
    Impairments
    
    
    (18,429,000
    )
    
    
    
    
    
    
    (18,429,000
    )Effect of foreign currency translation
    
    
    
    
    
    
    65,000
    
    
    
    65,000Finance income recognized (1)
    
    
    17,687,000
    
    
    
    417,000
    
    
    
    18,104,000Balance, end of period
    
    $
    137,497,000
    
    
    $
    230,726,000
    
    
    $
    368,223,000Finance income as a percentage of collections
    
    
    68.5
    %
    
    
    3.8
    %
    
    
    49.0
    %
 (1)
    
    Includes approximately $10.5 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. Supplementary Information:
   35




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##### Table of Contents



Collections Represented by Account Sales
 CollectionsRepresented
    
    
    FinanceBy Account
    
    
    IncomePeriod
    
    Sales
    
    
    EarnedSix months ended March 31, 2009
    
    $
    6,647,000
    
    
    $
    1,791,000Three months ended March 31, 2009
    
    $
    874,000
    
    
    $
    418,000Six months ended March 31, 2008
    
    $
    12,654,000
    
    
    $
    5,179,000Three months ended March 31, 2008
    
    $
    4,863,000
    
    
    $
    2,826,000
 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
    
    
    $
    105,391,000
    
    
    
    
    
    
    $
    105,391,000
    
    
    
    162
    %2002
    
    
    36,557,000
    
    
    
    47,921,000
    
    
    
    
    
    
    
    47,921,000
    
    
    
    131
    %2003
    
    
    115,626,000
    
    
    
    207,805,000
    
    
    $
    1,967,000
    
    
    
    209,772,000
    
    
    
    181
    %2004
    
    
    103,743,000
    
    
    
    175,948,000
    
    
    
    1,322,000
    
    
    
    177,270,000
    
    
    
    171
    %2005
    
    
    126,023,000
    
    
    
    194,724,000
    
    
    
    29,843,000
    
    
    
    224,567,000
    
    
    
    178
    %2006
    
    
    163,392,000
    
    
    
    218,991,000
    
    
    
    55,140,000
    
    
    
    274,131,000
    
    
    
    168
    %2007
    
    
    109,235,000
    
    
    
    68,921,000
    
    
    
    78,521,000
    
    
    
    147,442,000
    
    
    
    135
    %2008
    
    
    25,622,000
    
    
    
    21,926,000
    
    
    
    15,971,000
    
    
    
    37,897,000
    
    
    
    148
    %2009
    
    
    2,681,000
    
    
    
    813,000
    
    
    
    2,804,000
    
    
    
    3,617,000
    
    
    
    135
    %
 (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.  36




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##### Table of Contents



Recent Accounting Pronouncements
  Share-Based Payment
 The Fair Value Option for Financial Assets
and Financial Liabilities
    Fair Value Measurements
 
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
 a. Disclosure Controls and Procedures.
   37




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##### Table of Contents



b.
    
    Changes in Internal Controls Over Financial Reporting.
   
 PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 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
    
    
    11,662,899
    
    
    
    267,576Arthur Stern
    
    
    11,593,068
    
    
    
    337,407Herman Badillo
    
    
    11,561,102
    
    
    
    369,373David Slackman
    
    
    11,707,889
    
    
    
    222,586Edward Celano
    
    
    11,674,951
    
    
    
    255,524Harvey Leibowitz
    
    
    11,714,194
    
    
    
    216,281Louis A. Piccolo
    
    
    11,713,530
    
    
    
    216,530
  For
    
    
    Against
    
    
    Abstain
    
    
    Broker non-voteGrant Thornton LLP
    
    
    11,878,261
    
    
    
    45,025
    
    
    
    7,195
    
    
    
    0
 
 Item 5. Other Information
   38




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##### Table of Contents



Item 6. Exhibits
  31.1
    
    
    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, Robert J.
Michel, 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, Robert J.
Michel, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  39




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##### Table of Contents



ASTA FUNDING, INC.(Registrant)Date: May 8, 2009
    
    By:
    
    /s/ Gary Stern

Gary Stern, Chairman, President,Chief Executive Officer(Principal Executive Officer)Date: May 8, 2009
    
    By:
    
    /s/ Robert J. Michel

Robert J. Michel, Chief Financial Officer(Principal Financial Officer andPrincipal Accounting Officer)
  40




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##### Table of Contents



ExhibitNo.
    
    Description31.1
    
    
    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, Robert
J. Michel, 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, Robert
J. Michel, pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
  41