UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 13D

(Rule 13d-101)

INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT

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

§ 240.13d-2(a)

(Amendment No. 3)¹

Astea International, Inc.

(Name of Issuer)

Common Stock, $0.01 par value

(Title of Class of Securities)

04622E208

(CUSIP Number)

Mr. David L. Kanen

Kanen Wealth Management, LLC

5850 Coral Ridge Drive, Suite 309

Coral Springs, FL 33076

(631) 863-3100

ANDREW M. FREEDMAN, ESQ.

OLSHAN FROME WOLOSKY LLP

1325 Avenue of the Americas

New York, New York 10019

(212) 451-2300

(Name, Address and Telephone Number of Person

Authorized to Receive Notices and Communications)

September 28, 2018

(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 that 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 ¨.

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.

1              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 (“Act”) 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).

The following constitutes Amendment No. 3 to the Schedule 13D filed by the undersigned (“Amendment No. 3”). This Amendment No. 3 amends the Schedule 13D as specifically set forth herein.

Item 3 is hereby amended and restated to read as follows:

The Shares purchased by Philotimo were purchased with working capital (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market transactions. The Shares purchased by KWM were purchased with the funds for the accounts of its customers (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market transactions. The Shares purchased by Mr. Kanen were purchased with personal funds (which may, at any given time, include margin loans made by brokerage firms in the ordinary course of business) in open market transactions. The aggregate purchase price of the 194,710 Shares beneficially owned by KWM is approximately $849,954, including brokerage commissions. The aggregate purchase price of the 131,132 Shares beneficially owned by Philotimo is approximately $364,840, including brokerage commissions. The aggregate purchase price of the 2,600 Shares beneficially owned by Mr. Kanen is approximately $8,065, including brokerage commissions.

Item 4 is hereby amended to add the following:

On September 28, 2018, the Reporting Persons delivered a letter (the “Letter”) to the Issuer’s Chief Executive Officer and Chairman of the board of directors (the “Board”) reiterating their concern regarding the Issuer’s current capital structure, which the Reporting Persons believe has undermined the health of the Issuer resulting in a weakened balance sheet and reduced earnings and also serves as a repellant to new investors/prospective stockholders. While the Reporting Persons commend the Board for the formation of the special committee to examine the capital structure, specifically related to the outstanding convertible preferred stock, the Reporting Persons are concerned that it has been close to three months since the committee was formed and no developments or changes have been announced by the Issuer. The Reporting Persons further requested in the letter that the Board uphold its fiduciary duty to update and explain to existing stockholders how the Issuer’s current capital structure benefits all stakeholders. Moreover, the Reporting Persons highlighted the need for Board change and stated that having a wide range of perspectives represented in the boardroom is critical to effective corporate governance and is vital if the Board is able to successfully address the complex issues the Issuer faces. The Reporting Persons have identified a highly qualified director candidate for the Board's consideration for appointment as a Board member and expect to continue their constructive dialogue with the Issuer’s management team and Board regarding opportunities to unlock value at the Issuer.

The foregoing description of the Letter does not purport to be complete and is qualified in its entirety by reference to the full text of the Letter, which is filed as Exhibit 99.1, and is incorporated herein by reference.

Items 5(a)-(c) are hereby amended and restated to read as follows:

The aggregate percentage of Shares reported owned by each person named herein is based upon 3,594,549 Shares outstanding, as of August 9, 2018, which is the total number of Shares outstanding as reported in the Issuer’s Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission on August 14, 2018.

Percentage: Approximately 3.6%

Percentage: Approximately 9.1%

Percentage: Approximately 9.1%

KWM, in its role as investment manager to several customer accounts (collectively, the "Accounts") to which it furnishes investment advice, and Mr. Kanen, as the managing member of KWM, may each be deemed to beneficially own shares of the Issuer's Shares held in the Accounts.

Each Reporting Person, as a member of a “group” with the other Reporting Persons for the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended, may be deemed the beneficial owner of the Shares directly owned by the other Reporting Persons. Each Reporting Person disclaims beneficial ownership of such Shares except to the extent of his or its pecuniary interest therein.

Item 7 is hereby amended to add the following exhibit:

SIGNATURES

After reasonable inquiry and to the best of his knowledge and belief, each of the undersigned certifies that the information set forth in this statement is true, complete and correct.

Dated: September 28, 2018

SCHEDULE A

Transactions in the Shares of the Issuer Since the Filing of Amendment No. 2 to the Schedule 13D

PHILOTIMO FUND, lP 

Exhibit 99.1

Kanen Wealth Management, LLC Philotimo Fund, L.P. 5850 Coral Ridge Drive Suite 309 Coral Springs, FL 33076 P: (631) 863-3100 F: (631) 863-3103 W: KanenWealthManagement.com

September 28, 2018

Mr. Zack Bergreen and The Members of the Board of Directors of Astea International, Inc.
240 Gibraltar Road
Horsham, PA 19044

Dear Mr. Bergreen and Members of the Board,

As you are well aware, we filed a Schedule 13D on April 9th, 2018 and amicably shared our view on specific items that were counterproductive to value creation for ALL stockholders of Astea International, Inc. (“ATEA” or the “Company”). We believe some of the issues include the Company’s capital structure (which includes 10% convertible preferred stock paid to Chief Executive Officer and Chairman Mr. Bergreen) and the lack of experience and diversity on the Company’s Board of Directors (the “Board”).

We Are Concerned About the Company’s Capital Structure: The convertible preferred stock undermines the health of the Company, resulting in a weakened balance sheet, reduced earnings and also serves as a “repellant” to new investors/prospective ATEA stockholders. It has resulted in the Company trading at less than 1x revenue, which is a significant discount to ATEA’s publicly traded peers. This is especially unsettling in light of the Company’s growth, operating profitability, and future prospects. See table 1 for a list of public Software as a Service (“SaaS”) companies and their respective valuations. At a multiple of 3x revenue, which, in our view, would be one of the lowest valued SaaS companies, ATEA could achieve a fully diluted stock price that would be greater than $16 per share! (TTM revenue of $27.7M and assumes conversion of preferred)

We commend the Board for the formation of the special committee to examine the capital structure (the “Special Committee”), specifically related to the outstanding convertible preferred stock. Pursuant to the Company’s Form 8-K filed on June 29, 2018 with the Securities and Exchange Commission, the purpose of the Special Committee is “to determine if there is a viable recapitalization alternative for the Company that would positively impact shareholder value for ALL OF THE COMPANY’S STOCKHOLDERS (emphasis added).” 90 days later, we ask how might maintaining the convertible preferred stock “positively impact shareholder value for all of the Company’s stockholders”? ATEA’s balance sheet is being weakened by $500,000 per year, its earnings per share is reduced, and despite being a publicly traded company, ATEA has little new stock ownership! As demonstrated by Table 1, ATEA trades at an enormous discount.

We Believe the Company’s Board Suffers from Lack of Experience and Diversity:

We have expressed our view and made introductions to upgrade and refresh the Board. Currently, the Board is only represented by white males over the age of 60, with little or no public company or software-related experience. Having a wide range of perspectives represented in the boardroom is critical to effective corporate governance and is vital if the Board is able to successfully address the complex issues ATEA faces.

Again, how are all stockholders benefitting by the existing capital structure? We ask the Board to uphold its fiduciary duty and update and explain this to us! We look forward to continuing constructive dialogue and monitoring the Special Committee’s progress. We are hopeful our engagement can remain productive and collaborative and not be escalated.

 Sincerely,

Dave Kanen

President, Portfolio Manager

Kanen Wealth Management, LLC

Philotimo Fund, L.P.

P: (631) 863-3100

E: dkanen@kanenadvisory.com