================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                   -------------------------------------------

                                    FORM 10-Q
(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

For the quarterly period ended          March 31, 2002
                               ------------------------------

                                       or

[ ]Transition Report Pursuant to Section 13 or 15(d) of The Securities Exchange
     Act of 1934.

For the transition period from                            to
                                             --------         ---------

                         Commission File Number: 0-26330

                            ASTEA INTERNATIONAL INC.
             (Exact name of registrant as specified in its charter)

               Delaware                                         23-2119058
     --------------------------------                     --------------------
      (State or other jurisdiction of                       (I.R.S. Employer
     incorporation or organization)                        Identification No.)

         455 Business Center Drive, Horsham,  PA                       19044
         ---------------------------------------------             ------------
              (Address of principal executive offices)               (Zip Code)

       Registrant's telephone number, including area code: (215) 682-2500
                                                          ---------------

                                       N/A
--------------------------------------------------------------------------------
              (Former name, former address and former fiscal year,
                         if changed since last report)


Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes X No


As of May 10, 2002,  14,601,530  shares of the  registrant's  Common Stock,  par
value $.01 per share, were outstanding.







                                          ASTEA INTERNATIONAL INC.

                                                 FORM 10-Q
                                              QUARTERLY REPORT
                                                   INDEX


                                                                                                  Page No.
                                                                                                  
Facing Sheet                                                                                         1

Index                                                                                                2

PART I - FINANCIAL INFORMATION

Item 1.             Consolidated Financial Statements

                    Consolidated Balance Sheets (Unaudited)                                           3

                    Consolidated Statements of Operations (Unaudited)                                 4

                    Consolidated Statements of Cash Flows (Unaudited)                                 5

                    Notes to Unaudited Consolidated Financial Statements                              6

Item 2.             Management's Discussion and Analysis of Financial
                    Condition and Results of Operations                                               7

Item 3.             Quantitative and Qualitative Disclosure About Market Risk                        10

PART II - OTHER INFORMATION

Item 1.             Legal Proceedings                                                                10

Item 2.             Changes in Securities and Use of Proceeds                                        10

Item 3.             Defaults upon Senior Securities                                                  10

Item 4.             Submission of Matters to a Vote of Security Holders                              10

Item 5.             Other Information                                                                10

Item 6.             Exhibits and Reports on Form 8-K                                                 10

                    Signatures                                                                       12











                                                     2













PART I - FINANCIAL INFORMATION

Item 1.  CONSOLIDATED FINANCIAL STATEMENTS


                                         ASTEA INTERNATIONAL INC.
                                        CONSOLIDATED BALANCE SHEETS



                                                                        March 31,            December 31,
                                                                          2002                   2001
                                                                      ------------           ------------
                                ASSETS                                 (Unaudited)
Current assets:
                                                                                       
  Cash and cash equivalents                                           $  3,780,000           $  4,071,000

  Investments available for sale                                         2,995,000              2,987,000
  Receivables, net of reserves of $940,000 and $955,000                  7,108,000              7,343,000
  Prepaid expenses and other                                               991,000                822,000
                                                                      ------------           ------------
          Total current assets                                          14,874,000             15,223,000

Property and equipment, net                                                580,000                617,000
Capitalized software, net                                                1,382,000              1,412,000
Other assets                                                               730,000                763,000
                                                                      ------------           ------------
          Total assets                                                $ 17,566,000           $ 18,015,000
                                                                      ============           ============

          LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current portion of long-term debt                                   $     13,000           $     34,000
  Accounts payable and accrued expenses                                  3,360,000              3,627,000
  Deferred revenues                                                      4,396,000              4,249,000
                                                                      ------------           ------------
          Total current liabilities                                      7,769,000              7,910,000

Stockholders' equity:
   Preferred stock, $.01 par value, 5,000,000 shares
      authorized, none issued                                                    -                      -
   Common stock, $.01 par value, 25,000,000 shares
      authorized, 14,825,000 outstanding                                   148,000                148,000
   Additional paid-in capital                                           22,674,000             22,674,000
   Cumulative translation adjustment                                    (1,272,000)            (1,256,000)
   Accumulated deficit                                                 (11,534,000)           (11,239,000)
   Less:  treasury stock at cost, 223,000 and 227,000                     (219,000)              (222,000)
                                                                      ------------           ------------
                  Total stockholders' equity
                                                                         9,797,000             10,105,000
                                                                      ------------           ------------
                  Total liabilities and stockholders' equity          $ 17,566,000           $ 18,015,000
                                                                      ============           ============

                     See accompanying notes to the consolidated financial statements.



                                                    3



                                          ASTEA INTERNATIONAL INC.
                                    CONSOLIDATED STATEMENTS OF OPERATIONS



                                                                                Three Months Ended
                                                                                     March 31,
                                                                             2002                2001
                                                                        (Unaudited)
                                                                        ------------           ------------
Revenues:
                                                                                         
   Software license fees                                                $  1,466,000           $  2,282,000
   Services and maintenance                                                2,487,000              2,717,000
                                                                        ------------           ------------
              Total revenues                                               3,953,000              4,999,000
                                                                        ------------           ------------

Costs and expenses:
    Cost of software license fees                                            275,000                228,000
   Cost of services and maintenance                                        1,632,000              1,847,000
   Product development                                                       440,000                583,000
    Sales and marketing                                                    1,259,000              1,438,000
    General and administrative                                               629,000                841,000
                                                                        ------------           ------------
              Total costs and expenses                                     4,235,000              4,937,000
                                                                        ------------           ------------
(Loss) income from operations                                               (282,000)                62,000

Interest income, net                                                          38,000                107,000
                                                                        ------------           ------------
(Loss) income before income taxes                                           (244,000)               169,000

Income tax expense                                                            50,000                      -
                                                                        ------------           ------------
Net (loss) income                                                       $   (294,000)          $    169,000
                                                                        ============           ============

Basic and diluted (loss) earnings per share:
     Net (loss) income per share                                        $      (0.02)          $       0.01
Shares outstanding used in computing basic (loss) earnings
     per share                                                            14,602,000             14,698,000
  Shares outstanding used in computing diluted (loss) earnings
   per  share                                                             14,602,000             14,772,000



                      See accompanying notes to the consolidated financial statements.





                                                     4







                                                    ASTEA INTERNATIONAL INC.
                                              CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (Unaudited)

                                                                                                      Three Months Ended
                                                                                                           March 31,
                                                                                                 2002                   2001
                                                                                              -----------           -----------
                                                                                              (Unaudited)
Cash flows from operating activities:
                                                                                                              
   Net (loss) income                                                                          $  (294,000)          $   169,000
   Adjustments to reconcile net (loss) income to net cash (used in)
provided by
        operating activities:
           Depreciation and amortization                                                          329,000               388,000
   Changes in operating assets and liabilities:
            Receivables                                                                           172,000               (92,000)
            Prepaid expenses and other                                                           (156,000)               18,000
            Other assets                                                                           33,000                     -
            Accounts payable and accrued expenses                                                (114,000)              (91,000)
            Accrued restructuring                                                                (156,000)                    -
            Deferred revenues                                                                     167,000              (261,000)
                                                                                              -----------           -----------
   Net cash (used in) provided by operating activities                                            (19,000)              131,000
                                                                                              -----------           -----------

Cash flows from investing activities:
            Purchases of investments                                                               (9,000)           (2,485,000)
            Purchases of property and equipment                                                   (67,000)              (76,000)
            Capitalized  software development costs                                              (188,000)             (150,000)
                                                                                              -----------           -----------
   Net cash used in investing activities                                                         (264,000)           (2,711,000)
                                                                                              -----------           -----------

Cash flows from financing activities:
            Proceeds from exercise of stock options and employee stock purchase plan                2,000                 3,000
            Repayments of debt                                                                    (21,000)              (53,000)
            Purchases of treasury stock                                                                 -              (157,000)
                                                                                              -----------           -----------
   Net cash used in financing activities                                                          (19,000)             (207,000)
                                                                                              -----------           -----------

   Effect of exchange rate changes on cash
                                                                                                   11,000                40,000
                                                                                              -----------           -----------
   Net decrease in cash and cash equivalents                                                     (291,000)           (2,747,000)
   Cash, beginning of period
                                                                                                4,071,000             5,208,000
                                                                                              -----------           -----------
   Cash, end of period                                                                        $ 3,780,000           $ 2,461,000
                                                                                              ===========           ===========


                      See accompanying notes to the consolidated financial statements.



                                                               5


Item 1.   CONSOLIDATED FINANCIAL STATEMENTS (Continued)

                            ASTEA INTERNATIONAL INC.
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS



1.    BASIS OF PRESENTATION
      ----------------------

The consolidated  financial statements at March 31, 2002 and for the three month
periods  ended  March  31,  2002  and  2001  of  Astea  International  Inc.  and
subsidiaries   (the   "Company")  are  unaudited  and  reflect  all  adjustments
(consisting only of normal recurring  adjustments)  which are, in the opinion of
management,  necessary for a fair  presentation  of the  financial  position and
operating results for the interim periods. The consolidated financial statements
should be read in conjunction  with the  consolidated  financial  statements and
notes thereto,  together with Management's  Discussion and Analysis of Financial
Condition  and Results of  Operations,  contained in the  Company's  2001 Annual
Report on Form 10-K which are hereby incorporated by reference in this quarterly
report on Form 10-Q.  Results of operations  and cash flows for the three months
ended March 31, 2002 are not  necessarily  indicative of the results that may be
expected for the full year.

2.       RESTRUCTURING CHARGES

During the fourth quarter of 2001, the Company  recorded a restructuring  charge
of  $409,000 in  connection  with  severance  costs to  downsize  the  Company's
employment rolls ($211,000) and eliminate excess office space ($198,000). During
the first quarter of 2002, the Company made payments of $156,000  related to the
2001 Restructuring Plan, including severance obligations of $133,000 and $23,000
related to lease obligations.

3.   STOCKHOLDERS' EQUITY/COMPREHENSIVE LOSS
     ---------------------------------------

The reconciliation of Stockholders'  Equity and comprehensive loss from December
31, 2001 to March 31, 2002 is summarized as follows:



                                                              Cumulative
                                              Additional       Currency
                                 Common        Paid-In       Translation     Accumulated     Treasury    Comprehensive
                                   Stock       Capital        Adjustment       Deficit        Stock          Loss
                                 ----------- -------------- ---------------- -------------- ------------ ---------------
                                                                                     
Balance at December 31, 2001      $148,000    $22,674,000     $(1,256,000)    $(11,239,000) $ (222,000)  $          -
Issuance of common stock
   under employee stock
   purchase plan                         -              -               -           (1,000)      3,000              -
Cumulative translation
   adjustment                            -              -         (16,000)               -           -        (16,000)
Net loss                                 -              -               -         (294,000)          -       (294,000)
                                 ----------- -------------- ---------------- -------------- ------------ ---------------
Balance at March 31, 2002         $148,000    $22,674,000    $ (1,272,000)    $(11,534,000) $ (219,000)    $ (310,000)
                                 =========== ============== ================ ============== ============ ===============


4.   MAJOR CUSTOMERS
     ---------------

The Company had no customers  that  accounted for 10% or more of revenues in the
first quarter of 2002.



                                       6





Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
           RESULTS OF OPERATIONS
           ---------------------

Overview

This document contains various  forward-looking  statements and information that
are  based  on  management's   beliefs,   assumptions  made  by  management  and
information  currently  available to management.  Such statements are subject to
various  risks and  uncertainties,  which  could  cause  actual  results to vary
materially from those contained in such forward-looking  statements.  Should one
or more of these  risks  or  uncertainties  materialize,  or  should  underlying
assumptions  prove  incorrect,  actual  results may vary  materially  from those
anticipated,  estimated,  expected or  projected.  Certain of these,  as well as
other risks and  uncertainties,  are  described in more detail herein and in the
Company's  Annual  Report on Form 10-K for the fiscal  year ended  December  31,
2001.

The Company  develops,  markets and supports  Customer  Relationship  Management
(CRM) software  solutions for companies that sell and service capital equipment.
Clients include Fortune 500 to mid-size  companies that automate equipment sales
and service  business  processes to increase  competitive  advantages,  top-line
revenue growth,  profitability,  and customer  loyalty.  The Company  supports a
global  client base with a worldwide  sales and service  network  that  conducts
business  through  Company  facilities  in the United  States,  United  Kingdom,
Australia, the Netherlands, and Israel.

Over the past year, the Company has been in the process of making the transition
from a field service software  provider to a provider of comprehensive  suite of
CRM solutions.  In addition to field service, the CRM suite also streamlines and
automates  processes for managing  sales and marketing,  multi-channel  customer
contact centers and  professional  services.  The Company  continues to focus on
companies in industries that sell and service equipment.

The Company continues to make a significant investment in product development in
support of the transition.  As economic conditions throughout the world continue
to  deteriorate,   the  Company  diligently  monitors  costs  and  manages  them
aggressively. The Company believes that its investment in development along with
its continued  commitment to marketing its CRM suite will favorably position the
Company when economic conditions improve in the future.

Critical Accounting Policies

Financial  Reporting  Release  No.  60,  which  was  recently  released  by  the
Securities  and  Exchange  Commission,  requires  all  companies  to  include  a
discussion of critical accounting policies or methods used in the preparation of
its  financial  statements.   The  significant   accounting  policies  of  Astea
International  Inc.  are  described  in Note 2 of the Notes to the  Consolidated
Financial  Statement of Operations  Procedures in the Company's Annual Report on
Form 10-K. The significant accounting policies that the Company believes are the
most  critical to aid in fully  understanding  its  reported  financial  results
include the following:

Revenues

Revenue is recognized in accordance with Statement of Position (SOP) 97-2, which
provides  guidelines  on  the  recognition  of  software  license  fee  revenue.
Principally,   revenue  may  be  recognized  when  persuasive   evidence  of  an
arrangement  exists,  delivery  has  occurred,  the  license  fee is  fixed  and
determinable and the collection of the fee is probable.  The Company allocates a
portion of its software revenue to post-contract  support activities or to other
services or products  provided to the customer free of charge or at non-standard
discounts when provided in conjunction with the licensing  arrangement.  Amounts
allocated are based upon standard prices charged for those services or products.
Software  license  fees for  resellers or other  members of the  indirect  sales
channel are based on a fixed percentage of the Company's  standard  prices.  The
Company  recognizes  software  license revenue for such contracts based upon the
terms and conditions provided by the reseller to its customer.

Revenue from  post-contract  support is recognized  ratably over the term of the
contract on a straight-line  basis.  Consulting and training  service revenue is
generally  recognized at the time the service is  performed.  Fees from licenses
sold together with consulting  services are generally  recognized upon shipment,
provided  that the  contract  has been  executed,  delivery of the  software has



                                       7


occurred,  fees are  fixed and  determinable  and  collection  is  probable.  In
instances where the aforementioned  criteria have not been met, both the license
and the consulting fees are recognized under the percentage of completion method
of contract accounting.

In limited instances, the Company will enter into contracts for which revenue is
recognized  under contract  accounting.  The  accounting  for such  arrangements
requires  judgement,  which  impacts  the  timing  of  revenue  recognition  and
provision for estimated losses, if applicable.

Capitalized Software and Research Development Costs

Our  policy  on  capitalized   software  costs  determines  the  timing  of  our
recognition of certain  development  costs. In addition,  this policy determined
whether the cost is classified as  development  expense or cost of license fees.
Management  is required to use  professional  judgement in  determining  whether
development costs meet the criteria for immediate expense or capitalization.

Results of Operations

Comparison of Three Months Ended March 31, 2002 and 2001


Continuing Operations

Revenues

Revenues decreased $1,046,000,  or 21%, to $3,953,000 for the three months ended
March 31,  2002 from  $4,999,000  for the three  months  ended  March 31,  2001.
Software license fee revenues decreased  $816,000,  or 36%, from the same period
last year.  Services and  maintenance  fees for the three months ended March 31,
2002 amounted to $2,487,000, a 9% decrease from the same quarter in 2001.

The Company's international operations contributed $1,201,000 of revenues in the
first quarter of 2002 compared to $1,798,000 in the first quarter of 2001.  This
represents  a 33%  decrease  from the  same  period  last  year and 30% of total
revenues  in the first  quarter  2002.  The  decrease  in revenues is due to the
economic conditions in the international markets.

Software  license fee revenues  decreased 36% to $1,466,000 in the first quarter
of 2002 from  $2,282,000 in the first quarter of 2001. The decrease is primarily
attributable to Alliance  Enterprise license revenues that decreased $795,000 or
38%, to  $1,289,000  in the first  quarter of 2002 from  $2,084,000 in the first
quarter of 2001.  DISPATCH-1  accounted  for 12% of total  software  license fee
revenues  in the first  quarter  of 2002  compared  to 9% of total  license  fee
revenues in the first  quarter of 2001.  The  decrease  in license  revenue is a
direct  result of the  continuation  of the  economic  downturn  resulting in an
extended sales cycle.

Services  and  maintenance  revenues  decreased  9% to  $2,487,000  in the first
quarter  of 2002 from  $2,717,000  in the first  quarter of 2001.  The  decrease
primarily  relates to service and  maintenance  revenues from  DISPATCH-1  which
decreased  $353,000 to $1,062,000  from $1,415,000 in the first quarter of 2001.
The  decrease  in  DISPATCH-1  service  and  maintenance  revenue  is due to the
anticipated  decline in demand for these  services  including  the  decrease  in
service  and  maintenance  revenue  from  two  major  customers  that  purchased
DISPATCH-1  source code in prior years.  The decrease in DISPATCH-1  service and
maintenance  revenues  was  partially  offset  by an  increase  of  $123,000  in
AllianceEnterprise services.

Costs of Revenues

Cost of software  license fees increased 21% to $275,000 in the first quarter of
2002  from  $228,000  in the  first  quarter  of 2001.  Included  in the cost of
software  license fees is the fixed cost of capitalized  software  amortization.
Capitalized software amortization was $217,000 and $200,000 in the first quarter
of 2002 and 2001, respectively.  The cost of software license fees increased due
to increased  third party  product  costs.  The software  licenses  gross margin
percentage  was 81% in the first  quarter of 2002  compared  to 90% in the first
quarter of 2001.  This decrease in gross margin was  attributable to the cost of



                                       8

certain  third  party  costs  included  in 2002  cost of  license  fees  and the
relationship  of the fixed cost of  amortized  capitalized  software  to a lower
level of sales in 2002.

Cost of  services  and  maintenance  decreased  12% to  $1,632,000  in the first
quarter of 2002 from  $1,847,000 in the first  quarter of 2001.  The decrease in
cost of service and  maintenance  is primarily  attributed  to fewer  DISPATCH-1
service  personnel due to the decreasing  demand for its services.  The services
and  maintenance  gross margin  percentage  was 34% in the first quarter of 2002
compared to 32% in the first  quarter of 2001.  The  increase  in  services  and
maintenance gross margin was primarily due to increased utilization for Alliance
Enterprise service professionals.

Product Development

Product  development  expense  decreased 26% to $440,000 in the first quarter of
2002 from  $583,000  in the first  quarter  of 2001.  The  decrease  in  product
development expenses is attributable to the increased capitalization of software
costs and favorable  exchanges which allowed an equal level of activity at lower
costs.  Product  development  as a  percentage  of revenues was 11% in the first
quarter of 2002 compared with 12% in the first quarter of 2001.

Sales and Marketing

Sales and marketing  expense decreased 12% to $1,259,000 in the first quarter of
2002 from  $1,438,000  in the first  quarter of 2001.  The decrease in sales and
marketing  is  attributable  to reduced  headcount  as well as lower  commission
expense from decreased license revenues. As a percentage of revenues,  sales and
marketing expenses increased to 32% from 29% in the first quarter of 2001.

General and Administrative

General  and  administrative  expenses  decreased  25% to  $629,000 in the first
quarter of 2002 from  $841,000  in the first  quarter of 2001.  The  decrease in
general and  administrative  expenses is due to lower bad debt expense and legal
costs.

Interest Income, net

Interest  income,  net  decreased  $69,000 from $107,000 in the first quarter of
2001.  The  decrease  resulted  primarily  from lower  interest  rates earned on
invested securities from the same period as last year.

International Operations

Total revenue from the Company's international operations decreased by $597,000,
or 33%,  to  $1,201,000  in first  quarter of 2002 from  $1,798,000  in the same
quarter in 2001.  The  decrease in revenue  from  international  operations  was
primarily  attributable  to the  decreasing  demand for  DISPATCH-1  and reduced
service revenues from Alliance Enterprise.  International operations resulted in
a $284,000 loss for the first quarter ended March 31, 2002 compared to a loss of
$96,000 in the same quarter in 2001.

The Company has  reviewed  the impact of its  subsidiaries  dominated  in German
deutsche marks,  French francs,  and the Dutch guilder  converting into the Euro
beginning  January 1, 2002.  This  conversion has had no material  impact on its
systems related to the Company's  business  activities and financial  reporting.
The Company is not aware of any  circumstances  indicating that the introduction
of the  Euro  caused  or will  cause  material  misstatements  in the  Company's
accounting records or adversely affects business operations in the future.

Liquidity and Capital Resources

Net cash used in  operating  activities  was $19,000 for the three  months ended
March 31, 2002 compared to cash provided by operations of $131,000 for the three
months  ended  March  31,  2001.  This  increase  in  cash  used  was  primarily
attributable  to a net loss  incurred  for the  first  three  months  of 2002 of
$294,000 as compared to  generating  net income of $169,000  for the first three
months of 2001.  The  increase  was also due to  increased  payments  of prepaid



                                       9


expenses  and  accounts  payable  and  accrued  expenses  partially  offset by a
decrease in accounts receivable and an increase in deferred revenues.

The  Company's  investing  activities  used  $264,000 of cash in the first three
months of 2002 compared to using $2,711,000 of cash in the first three months of
2001.  The  decrease  in cash used is  primarily  attributable  to a decrease in
investment purchases.

The  Company  used  $19,000 of cash for  financing  activities  during the three
months ended March 31, 2002 compared to cash used of $207,000 in the first three
months of 2001. The Company did not purchase any treasury stock during the first
three months of 2002, as compared to $157,000 of treasury stock purchases during
the first three months of 2001.

At March 31, 2002, the Company had a working capital ratio of 1.9:1,  with cash,
cash equivalents and investments  available for sale of $6,775,000.  The Company
believes that it has adequate cash resources to make the  investments  necessary
to  maintain  or improve its  current  position  and to sustain  its  continuing
operations for the foreseeable  future. The Board of Directors from time to time
reviews the Company's forecasted operations and financial condition to determine
whether and when payment of a dividend or dividends is appropriate.  The Company
does not anticipate that its operations or financial  condition will be affected
materially by inflation.

Variability of Quarterly Results and Potential Risks Inherent in the Business
-----------------------------------------------------------------------------

The Company's  operations are subject to a number of risks,  which are described
in more detail in the Company's  prior SEC filings.  Risks which are peculiar to
the Company on a quarterly  basis,  and which may vary from  quarter to quarter,
include but are not limited to the following:

o    The Company's  quarterly  operating results have in the past varied and may
     in the future vary  significantly  depending  on factors  such as the size,
     timing and recognition of revenue from  significant  orders,  the timing of
     new product  releases and product  enhancements,  and market  acceptance of
     these new releases and enhancements,  increases in operating expenses,  and
     seasonality of its business.

o    The Company's future success will depend in part on its ability to increase
     licenses  of  AllianceEnterprise  and other new product  offerings,  and to
     develop new products and product  enhancements  to complement  its existing
     field service, sales automation and customer support offerings.

o    The Customer  Relationship  Management  (CRM) software  market is intensely
     competitive.

o    International  sales  for the  Company's  products  and  services,  and the
     Company's  expenses  related to these sales,  continue to be a  substantial
     component of the Company's operations. International sales are subject to a
     variety of risks,  including  difficulties  in  establishing  and  managing
     international   operations  and  in   translating   products  into  foreign
     languages.

o    The market  price of the  common  stock  could be  subject  to  significant
     fluctuations in response to, and may be adversely  affected by,  variations
     in quarterly operating results,  changes in earnings estimates by analysts,
     developments in the software industry,  adverse earnings or other financial
     announcements   of  the  Company's   customers  and  general  stock  market
     conditions, as well as other factors.





                                       10


Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
--------------------------------------------------------------------

         Interest Rate Risk.  The Company's  exposure to market risk for changes
in interest rates relates primarily to the Company's investment  portfolio.  The
Company does not have any derivative financial instruments in its portfolio. The
Company  places its  investments  in  instruments  that meet high credit quality
standards.  The Company is adverse to principal  loss and ensures the safety and
preservation  of its invested  funds by limiting  default risk,  market risk and
reinvestment risk. As of March 31, 2002, the Company's  investments consisted of
U.S.  government  agencies securities and commercial paper. The Company does not
expect any material loss with respect to its investment portfolio.

         Foreign  Currency  Risk.  The  Company  does not use  foreign  currency
forward exchange contracts or purchased currency options to hedge local currency
cash flows or for trading purposes.  All sales  arrangements with  international
customers are denominated in foreign  currency.  The Company does not expect any
material loss with respect to foreign currency risk.

         The Company has  reviewed the impact of its  subsidiaries  dominated in
German deutsche marks,  French francs, and the Dutch guilder converting into the
Euro beginning  January 1, 2002.  This  conversion has had no material impact on
its  systems  related  to  the  Company's  business   activities  and  financial
reporting.  The Company is not aware of any  circumstances  indicating  that the
introduction  of the Euro  caused or will cause  material  misstatements  in the
Company's  accounting  records or adversely  affects business  operations in the
future.

PART II - OTHER INFORMATION
---------------------------

Item 1.           Legal Proceedings
-----------------------------------

From time to time,  the  Company is involved  in  litigation  relating to claims
arising out of its  operations in the normal course of business.  The Company is
not involved in any legal  proceedings,  which would, in  management's  opinion,
have a  material  adverse  effect  on  the  Company's  business  or  results  of
operations.

Item 2.           Changes in Securities and Use of Proceeds
-----------------------------------------------------------

During the quarter ended March 31, 2002, the Company did not purchase any shares
of its  outstanding  common stock.  During the quarter ended March 31, 2001, the
Company  purchased  167,400  shares of its  outstanding  stock.  The  shares are
recorded in the balance sheet as treasury stock.

Item 3.           Defaults Upon Senior Securities
-------------------------------------------------

     There have been no defaults by the Company on any Senior Securities during
the quarter ended March 31, 2002.

Item 4.           Submission of Matters to a Vote of Security Holders
---------------------------------------------------------------------

No matters were  submitted to a vote of the  Company's  stockholders  during the
first quarter of the fiscal year covered by this report through the solicitation
of proxies or otherwise.

Item 5.           Other Information
-----------------------------------

None.

Item 6.           Exhibits and Reports on Form 8-K
--------------------------------------------------


(A)      Exhibits
                  None.

(B)      Reports on Form 8-K
                  None.




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                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the  undersigned,  thereunto  duly  authorized  this XX day of May
2002.

                                         ASTEA INTERNATIONAL INC.


                                         By: /s/Zack B. Bergreen
                                             ------------------------------
                                             Zack B. Bergreen
                                             Chief Executive Officer
                                             (Principal Executive Officer)

                                         By: /s/Fredric Etskovitz
                                             ------------------------------
                                             Fredric Etskovitz
                                             Chief Financial Officer
                                             (Principal Financial and Chief
                                             Accounting Officer)



















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