Astea International Inc. ("Astea" or the Company) (ATEA) provides software for service management and mobile workforce solutions.

The original Complaint alleges that the Defendants, Astea and certain of its ranking executives, materially overstated and exaggerated Astea's financial health throughout the relevant period. In particular, it is alleged that the Defendants failed to accurately account for the Company's software development costs under Generally Accepted Accounting Principles ("GAAP"). As a result, the Complaint alleges, Astea overstated its earnings by failing to comply with GAAP when recording its expenses.

The Complaint further alleges that on or around March 31, 2006, the Company announced that it would have to restate its financial results for the three quarters ended September 30, 2005, in order to adjust for the improper accounting. On news of the restatement, the price of the Company's stock plummeted from $16.50 to $11.73 per share, a loss of nearly 30% in a single day, on exceptionally high volume. During the relevant period, Astea stock traded as high as $25.71 per share.

As summarized by the Company’s FORM 10-Q for the quarterly period ended September 30, 2006, on and shortly after April 6, 2006, certain purported shareholder class action and derivative lawsuits were filed in the United States District Court for the Eastern District of Pennsylvania against the Company and certain of its directors and officers. The lawsuits, alleging that the Company and certain of its officers and directors violated federal securities laws and state laws, relate to the Company’s March 31, 2006 announcement of the accounting restatement for overcapitalized software development costs during the first two quarters of 2005 and undercapitalized software development costs during the third quarter of 2005. Pursuant to a Stipulation and Order of the Court entered July 12, 2006, the putative class actions were consolidated, certain persons were appointed as lead Plaintiffs, and a consolidated amended Complaint was filed on September 11, 2006. The Defendants filed a motion to dismiss the consolidated amended Complaint on October 26, 2006, and the Court will decide this motion once briefing has been completed. On September 14, 2006, the Court consolidated the putative derivative actions, appointed certain persons to serve as co-lead Plaintiffs, and ordered co-lead Plaintiffs to file a consolidated amended derivative Complaint within thirty (30) days after a decision is rendered on Defendants’ motion to dismiss the consolidated class action.

According to a press release dated August 13, 2007, Astea announced that the United States District Court for the Eastern District of Pennsylvania dismissed, without prejudice, the Consolidated Amended Class Action Complaint filed on September 11, 2006 against the Company and two of its executive officers. The Complaint alleged violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act), Rule 10b-5 and Section 20(a) of the Exchange Act, arising from the Company's 2006 restatement of certain prior period financial statements. The Court's decision to dismiss the Complaint is based on several grounds, including Plaintiffs' failure to set forth particularized facts giving rise to a strong inference that Defendants acted with an improper motive or with a conscious disregard of the truth or recklessness. In the Court's dismissal without prejudice, the Plaintiffs were granted leave to file an amended Consolidated Amended Complaint within 30 days.

By the Stipulation and Order of Dismissal with Prejudice dated August 22, 2007, the action is dismissed with prejudice. The case is terminated.