UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): September 24,
2008
ASTEA INTERNATIONAL
INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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0-26330
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23-2119058
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(State
or Other Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
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240
Gibraltar Road
Horsham,
Pennsylvania 19044
(Address
of principal executive offices, including zip code)
(215)
682-2500
(Registrant's
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13-4(c))
Item
1.01. Entry into a Material Definitive Agreement.
On
September 24, 2008, Astea International Inc. (the “Company”)
entered into a preferred stock purchase agreement (the “Preferred Stock
Purchase Agreement”) with Zack Bergreen, the Company’s Chairman, Founder
and Chief Executive Officer (the “Purchaser”),
for the private placement of 826,446 shares (the “Shares”)
of newly designated Series A Convertible Preferred Stock of the Company (the
“Series
A Preferred
Stock”), for a purchase price of $3.63 per share and an aggregate
investment of $3,000,000 (the “Private Placement
Transaction”). The per share purchase price was
determined using a formula which took as the price the greater of (i) the
average closing bid price of a share of the common stock of the Company (the
“Common
Stock”) on the NASDAQ Capital Market for the 30 trading days ending two
trading days prior to the date of the purchase of the Series A Preferred Stock
and (ii) 110% of the closing bid price of the Common Stock on the NASDAQ Capital
Market on the date of the purchase. Pursuant to the terms
of the Preferred Stock Purchase Agreement, the Company also granted the
Purchaser certain registration rights in the event the Company elects to file a
registration statement with the Securities and Exchange Commission relating to
an offering of its equity securities under the Securities Act of 1933, as
amended (the “Securities
Act”). The audit committee (the “Audit
Committee”) of the board of directors of the Company (the “Board of
Directors”), consisting of three independent directors, negotiated and
unanimously approved the Private Placement Transaction.
Pursuant
to the terms of the Certificate of Designation of Series A Convertible Preferred
Stock (the “Certificate of
Designation”), the Series A Preferred Stock is convertible into shares of
Common Stock on a one-to-one ratio, subject to customary anti-dilution
provisions. The Series A Preferred Stock will pay a quarterly
dividend, which will accrue at an annual rate of 6% of the purchase price,
subject to certain rate adjustments as provided for under the Certificate of
Designation. The Purchaser may convert up to 40% of his Shares during
the first six months following issuance of the Series A Preferred Stock, and
thereafter, may convert up to 100% of his Shares at any time. The
Company has the right to redeem up to 60% of the Series A Preferred Stock at its
option during the first six months following issuance, at a price equal to 110%
of the purchase price plus all accrued and unpaid dividends. Such
conversion and redemption rights during the initial six month period following
issuance of the Series A Preferred Stock are not applicable in the event certain
change of control events occur. Pursuant to the terms of the
Certificate of Designation, commencing on the second anniversary of the date of
issuance of the Series A Preferred Stock, the Company may cause all Series A
Preferred Stock then outstanding to convert into Common Stock if the closing
price of the Common Stock, as reported on the principal exchange on which the
Common Stock is traded, exceeds 300% of the then current conversion price for 30
consecutive trading days. Commencing on the fourth anniversary of the
date of issuance of the Series A Preferred Stock, the Company may redeem all
Series A Preferred Stock then outstanding at a price equal to the greater of (i)
130% of the purchase price plus all accrued and unpaid dividends and (ii) the
fair market value of such number of shares of Common Stock which the holder of
the Series A Preferred Stock would be entitled to receive had the redeemed
Series A Preferred Stock been converted immediately prior to the
redemption.
Copies of
the Preferred Stock Purchase Agreement, the Certificate of Designation and the
Company’s press release dated September 25, 2008 announcing the Private
Placement Transaction, are filed as Exhibit 10.1, Exhibit 3.1 and Exhibit 99.1,
respectively, to this Current Report on Form 8-K and are incorporated herein by
reference. The description of the material terms of the Preferred
Stock Purchase Agreement is qualified in its entirety by reference to Exhibit
10.1. The description of the material terms of the Certificate of
Designation is qualified in its entirety by reference to Exhibit
3.1.
Item
3.02. Unregistered Sales of Equity Securities.
The
information set forth under Item 1.01 of this Current Report is incorporated
herein by reference.
The
Company issued the Shares in the Private Placement Transaction in reliance on
the exemption from registration provided for under Section 4(2) of the
Securities Act, and Rule 506 of Regulation D thereunder. The Company
relied on the exemption from registration provided for under Section 4(2) of the
Securities Act based in part on the representations made by the Purchaser,
including the representations with respect to the Purchaser’s status as an
accredited investor, as such term is defined in Rule 501(a) of the Securities
Act, and the Purchaser’s investment intent with respect to the Shares
purchased.
Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year.
The information set forth under Item
1.01 of this Current Report is incorporated herein by reference.
On
September 25, 2008, the Company filed the Certificate of Designation with the
Secretary of State of the State of Delaware. The Board of Directors
authorized and approved this filing on September 24, 2008 in connection with the
creation, reservation and designation of 826,446 shares of a series of preferred
stock as Series A Preferred Stock.
Item
9.01. Financial Statements and Exhibits.
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(d)
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The
following exhibits are furnished with this Current Report on Form
8-K:
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Rule 135c
Statement
This
Current Report on Form 8-K and the attached exhibits are being filed pursuant to
Rule 135c under the Securities Act and do not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these securities
in any state or jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of any
such state or jurisdiction.
Forward
Looking Statements
This
Current Report on Form 8-K contains forward-looking statements and expectations
of future results that are made under the “safe harbor” provisions of the
Private Securities Litigation Reform Act of 1995 and involve a number of risks
and uncertainties that could materially affect future results. Among these risk
factors are the continuing acceptance of the Company’s products, general
competitive pressures in the marketplace, and continued overall growth in the
customer relationship management solutions industry. Further information
regarding these as well as other key risk factors and meaningful cautionary
statements that could affect the Company’s financial results are
included at length in the Company’s Form 10-K for the fiscal year ended December
31, 2007, supplemented by subsequent filings made with the Securities and
Exchange Commission.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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Astea
International Inc.
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Date: September
26, 2008
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By: /s/ Rick
Etskovitz
Name: Rick
Etskovitz
Title: Chief
Financial Officer
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EXHIBIT
INDEX