Asta Funding to restate 2014, 2015 and 2016 financial statements
Asta Funding announced upon the recommendation of the Audit Committee of the Board of Directors, that the Company's previously issued financial statements for each of the years ended September 30, 2016, 2015 and 2014 and the interim periods contained therein, as well as the Company's unaudited consolidated financial statements for the quarters ended December 31, 2016, March 31, 2017 and June 30, 2017 can no longer be relied upon. Therefore, all earnings press releases and similar prior communications issued by the Company, as well as other prior statements made by or on behalf of the Company relating to those periods should not be relied upon. The Company intends to file the restated annual and quarterly financial statements for the Non-Reliance Periods as soon as practicable. The Company's authorized officers have discussed these matters with EisnerAmper LLP, the Company's current independent registered public accounting firm, and have notified Mazars USA LLP, the Company's former independent registered public accounting firm during the Non-Reliance Periods, of these matters. The Board's decision to restate the financial statements for the Non-Reliance Periods arose from the Company's re-evaluation of its historical conclusion to consolidate Pegasus Funding, LLC. Management has determined that it lacked the control required to consolidate Pegasus during the Non-Reliance Periods. As such, the Company should have reported its investment in Pegasus under the equity method in accordance with accounting principles generally accepted in the United States. Restating the financial statements to give effect to the Pegasus Matter is not anticipated to have a material impact on total net income attributable to the Company for the Non-Reliance Periods. In connection with the restatement of the Non-Reliance Periods, the Company intends to correct the financial statements for all known errors, including those that were previously corrected in prior filings as immaterial out-of-period adjustments. Additionally, the Company is in the process of evaluating its historical and current practices with respect to accounting for foreign currency matters under Accounting Standards Codification Topic 830 in accordance with accounting principles generally accepted in the United States. In connection with this evaluation, the Company has determined that its previous accounting treatment for certain foreign currency matters during the Non-Reliance Periods was not appropriate. The Company continues to assess and quantify the necessary adjustments, and while the impact of these adjustments will likely be significant to the Non-Reliance Periods, we are currently unable to specify the amounts or financial statement line items that will be impacted. The Company's management is assessing the effectiveness of its internal controls over financial reporting and disclosure controls and procedures during the Non-Reliance Periods. The Company will amend any disclosures pertaining to its evaluation of such controls and procedures as appropriate in connection with the Restated Filings.