UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549
	SCHEDULE 13D/A

 

(Amendment No. 1)

 

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

TO §240.13d-1(a) AND AMENDMENTS THERETO FILED

PURSUANT TO §240.13d-2(a)

 

(Name of Issuer)

 

(Title of Class of Securities)

 

(CUSIP Number)

 

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

 

(Date of Event Which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. x

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

* The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 

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This Amendment No. 1 amends and supplements, as set forth below, the information contained in Items 3, 4, 5 and 7 of the Schedule 13D that was originally filed with the Securities and Exchange Commission (the “SEC”) on November 27, 2012 (the “Schedule 13D”). Except as amended by this Amendment No. 1, all information contained in the Schedule 13D is, after reasonable inquiry and to the best of the Reporting Persons’ knowledge and belief, true, complete and correct as of the date of this Amendment No. 1. Capitalized terms used herein and not otherwise defined have the meanings set forth in the Schedule 13D.

 

Item 3.         Source and Amount of Funds or Other Consideration.

 

Item 3 is hereby amended and restated as follows:

 

The shares of Common Stock beneficially owned by the Reporting Persons were acquired by purchase on the open market for an aggregate purchase price of $1,060,572 using the personal funds of Mr. Ashton and the investment capital of Kinetic Catalyst Partners LLC.

 

Item 4.         Purpose of Transaction.

 

Item 4 is hereby amended and restated as follows:

 

Kinetic Catalyst Partners LLC acquired the shares of Common Stock that it beneficially owns in the ordinary course of its business of purchasing, selling, trading and investing in securities.

 

The Reporting Persons’ primary interest is to maximize the value of their investment. To this end, the Reporting Persons continually review the Company’s business affairs and financial position and future prospects, as well as conditions in the securities markets and general economic and industrial conditions. The Reporting Persons may, from time to time, depending on market conditions and other considerations, acquire additional securities or dispose of some or all of the securities of the Issuer held by them, as permitted by the relevant securities laws and any agreement or agreements that may be entered into with the Issuer.

 

In addition, in a letter to the shareholders of the Company dated May 6, 2013, the Reporting Persons stated their intent to withhold their vote for director Adrian Peters at the Company’s 2013 annual meeting of shareholders and encouraged other shareholders to do the same. A copy of the letter to the shareholders is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

Except as set forth above, the Reporting Persons do not have any plans or proposals which relate to or would result in: (a) the acquisition by any person of additional securities of the issuer, or the disposition of securities of the issuer; (b) an extraordinary corporation transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries; (c) a sale or transfer of a material amount of assets of the issuer or of any of its subsidiaries; (d) any change in the present board of directors or management of the issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board; (e) any material change in the present capitalization or dividend policy of the issuer; (f) any other material change in the issuer’s business or corporate structure; (g) changes in the issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any person; (h) causing a class of securities of the issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; (i) causing a class of equity securities of the issuer becoming eligible for termination of registration pursuant to  Section 12(g)(4) of the Act; or (j) any action similar to any of those enumerated above.

 

Item 5.         Interest in Securities of the Issuer.

 

Item 5 is hereby amended and restated as follows:

 

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(a)  As of the date hereof, the Reporting Persons are the beneficial owners of an aggregate of 282,127 shares of Common Stock, which represents approximately 7.9%(1) of the issued and outstanding shares of Common Stock.

 

(b) Each of the Reporting Persons has the shared power to vote or direct the vote, and the shared power to dispose of or direct the disposition of 282,127 shares of Common Stock, and the sole power to vote or direct the vote or to dispose or direct the disposition of no shares.(2)

 

(c)  The Reporting Persons have purchased and sold Common Stock on the open market in the last 60 days as follows:

 

Date		Purchaser		Type of  Transaction		Number of  Shares		Price Per  Share
March 18, 2013		Kinetic Catalyst Partners LLC		Purchase		5,000		$	2.95
March 19, 2013		Kinetic Catalyst Partners LLC		Purchase		700		$	2.94
March 26, 2013		Robert B. Ashton IRA		Purchase		2,500		$	3.00
March 27, 2013		Kinetic Catalyst Partners LLC		Purchase		1,000		$	3.00
March 28, 2013		Robert B. Ashton IRA		Sale		5,700		$	3.91
April 10, 2013		Kinetic Catalyst Partners LLC		Purchase		500		$	3.44
April 10, 2013		Robert B. Ashton IRA		Purchase		3,200		$	3.44
April 15, 2013		Robert B. Ashton IRA		Purchase		585		$	3.25
April 23, 2013		Robert B. Ashton IRA		Purchase		1,000		$	3.20
April 24, 2013		Kinetic Catalyst Partners LLC		Purchase		300		$	3.21
April 29, 2013		Kinetic Catalyst Partners LLC		Purchase		1,130		$	3.27

 

(d) No other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Common Stock of the Issuer held by the Reporting Persons.

 

Item 7.         Material to be Filed as Exhibits.

 

Item 7 is hereby amended and restated as follows:

 

Exhibit No.		Description
99.1		Letter to Shareholders dated May 6, 2013

 

(1)  Based on 3,587,299 shares of Common Stock outstanding as April 15, 2013.

(2)  Robert B. Ashton, in his capacity as the Portfolio Manager of Kinetic Catalyst Partners LLC, has the legal power to direct the voting and disposition of the Common Stock beneficially owned by Kinetic Catalyst Partners LLC.

 

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SIGNATURE

 

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete, and correct

 

Dated: May 6, 2013
	KINETIC CATALYST PARTNERS LLC
	By:	/s/ Robert B. Ashton
	Name:	Robert B. Ashton
	Title:	Portfolio Manager
	/s/ Robert B. Ashton
	Robert B. Ashton

 

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Exhibit 99.1

 

 

May 6, 2013

 

Dear Astea International Shareholder:

 

Vote “WITHHOLD” on Astea Director Adrian Peters

 

On behalf of Kinetic Catalyst Partners, I urge you to vote WITHHOLD on director nominee Adrian Peters at Astea’s June 13, 2013 meeting. Kinetic Catalyst Partners is one of Astea’s largest independent shareholders, with 283,027 shares representing 7.9% of the outstanding shares.

 

Adrian Peters has Failed to Provide Effective Independent Oversight

 

In a public company run by its largest shareholder, independent directors have a special duty to ensure that all public shareholders are treated equally and to avoid conflicts of interest. We believe Adrian Peters has failed on both counts.

 

Unequal Treatment of Shareholders

 

When Adrian Peters joined the board in June of 2000, the company had over $40 million in cash and cash equivalents. During the period from 2000 through 2012, over $18 million in cash has gone from the company to the company’s CEO and largest inside shareholder by virtue of interest payments, dividends, salary, consulting fees, vacation pay, and life insurance payments.

 

When the company needed cash in September 2008, rather than turn to third party financing sources or its existing shareholder base, the Board voted to secure such financing solely from the company’s CEO and largest inside shareholder, issuing to such insider preferred stock in exchange for a $3 million investment. In short, the Board voted to permit the company’s CEO the opportunity to reinvest a portion of the money already paid to him by the company in a preferential security that resulted in 20% dilution to the other shareholders and provides for a 10% interest payment that the company can ill afford to pay. Adding insult to injury was the fact the Board apparently did not see fit to see if the outside shareholders of the company would consider investment on these terms. This fact is particularly troubling given that the most recent 13D filer at the time publicly offered to do a straight equity deal.

 

We believe that the shares issued to the CEO in this financing transaction represent an overpayment to the CEO, the end result of which is an improper transfer of economic value and voting power from the public shareholders to the inside shareholder. It is the responsibility of the independent Board members, such as Adrian Peters, to ensure that such abuses do not occur.

 

 

Potential Conflict of Interest

 

The proxy statements from 2000 to present give Adrian Peters’ biographical summary without mention of any potential conflict or past relationship with Astea. Yet Adrian Peters’ Linkedln biographical information says he has served as President of Astea. Further, his company website for Boston Partners has a testimonial page from consulting clients that includes a quote from Astea’s Chairman and CEO.

 

Future Potential Conflicts

 

In future years, the independent directors may face additional needs to raise capital as well as corporate succession issues given the age of the CEO. We have grave concerns about the ability of the independent directors to face these potential issues fairly.

 

Demand Reform by Voting “Withhold” for Director Adrian Peters

 

Astea’s independent shareholders urgently require directors that are genuinely independent and accountable. By voting “Withhold” on Adrian Peters, you can help send that message to the Astea board. Contact independence@kinetic-catalyst.com for additional information.

 

Sincerely
/s/ Bob Ashton
Bob Ashton
Managing Member
Kinetic Catalyst Partners LLC

 

This letter is not a solicitation of authority to vote your proxy.

 

Please DO NOT send us your proxy card.

 

We encourage you to return to the company the proxy card it sent to you

 

and vote “Withhold” on Adrian Peters.

 

Kinetic Catalyst Partners LLC, 6 Occom Ridge Hanover NH 03755