x |
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 FOR THE FISCAL YEAR ENDED JULY 31,
2005
|
o |
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934 FOR THE TRANSITION PERIOD
FROM
_______TO _________
|
Nevada
(State
or Other Jurisdiction of Incorporation or Organization)
|
74-2849995
(IRS
Employer Identification No.)
|
|
8600
Wurzbach, Suite 700W
San
Antonio, Texas
(Address
of Principal Executive Offices)
|
78240
(Zip
Code)
|
Page
|
|
PART
I
|
|
3
|
|
3
|
|
4
|
|
4
|
|
5
|
|
5
|
|
5
|
|
6
|
|
6
|
|
7
|
|
9
|
|
13
|
|
13
|
|
13
|
|
13
|
|
14
|
|
PART
II
|
|
14
|
|
17
|
|
24
|
|
46
|
|
46
|
|
PART
III
|
|
46
|
|
48
|
|
50
|
|
51
|
|
51
|
|
54
|
· |
On
August 1, 2004, we acquired a
Competitive Local Exchange Carrier (“CLEC”) based in South Texas. This
acquisition served as a gateway to reach out to the Hispanic communities
residing along the US and Mexico border. Our strategy is to provide
reliable and affordable local and long distance services to the
underserved Hispanic community through Texas utilizing our VoIP
infrastructure.
|
· |
We
expanded our NexTone’
Communications Session Controller (soft-switch) by 50% to enhance
our
Voice over Internet Protocol (VoIP) network. This network expansion
has
allowed us to route our traffic more efficiently, improve our call
processing, monitor quality of service and enable us to share port
resources with our customers. The NexTone technology has allowed
us to be
more competitive and to improve margins in our wholesale international
telecommunication services. As a result of these enhancements to
our VoIP
Network our customer base has grown to approximately 45 customers
and our
revenue increased from $1,254,000 during the year ended July 31,
2004 to
$6,011,000 for the year ended July 31, 2005.
|
· |
Integration
of Voice and Data:
VoIP networks allows for the integration of voice, data traffic and
images
into the same network.
|
· |
Simplification:
An
integrated infrastructure that supports all forms of communication
allows
more standardization and less equipment management. The result is
a fault
tolerant design.
|
· |
Network
Efficiency:
The integration of voice and data fills up the data communication
channels
efficiently, thus providing bandwidth consolidation and reduction
of the
costs associated with idle bandwidth. The sharing of equipment and
operations costs across both data and voice users can also improve
network
efficiency since excess bandwidth on one network can be used by the
other,
thereby creating economies of scale for voice (especially given the
rapid
growth in data traffic). An integrated infrastructure that supports
all
forms of communication allows more standardization and reduces the
total
equipment complement. This combined infrastructure can support dynamic
bandwidth optimization and a fault tolerant design. The differences
between the traffic patterns of voice and data offer further opportunities
for significant efficiency improvements.
|
· |
Co-existence
with traditional communication mediums: IP
telephony can be used in conjunction with existing PSTN switches,
leased
and dial-up lines, PBXs and other customer premise equipment (CPE),
enterprise LANs, and Internet connections. IP telephony applications
can
be implemented through dedicated gateways, which in turn can be based
on
open standards platforms for reliability and scalability.
|
· |
Cost
reduction:
Under the VoIP network, the connection is directly to the Internet
backbone and as a result the telephony access charges and settlement
fees
are avoided.
|
· |
the
rapid growth of the Latino segment of the United States population
|
· |
Mexico’s
status as the top calling partner with the United States
|
· |
increase
in trade and travel between Latin America and the United States
|
· |
the
build-out of local networks and corresponding increase in the number
of
telephones in homes and businesses in Latin countries
|
· |
proliferation
of communications devices such as faxes, mobile phones, pagers, and
personal computers
|
· |
declining
rates for services as a result of increased competition.
|
· |
Maintain
approximately $10 million in registered and subscribed capital.
|
· |
Install
and operate a network in Mexico. The Mexican government will need
to
approve the operating plan before it is implemented; additionally
the
Mexican government will need to approve any future changes to the
operating plan before it can be implemented.
|
· |
Continuously
develop and conduct training programs for its staff.
|
· |
The
Concessionaire at all times needs to have an assigned individual
responsible for the technical functions to operate the concession.
|
· |
The
Concessionaire is required to provide continuous and efficient services
at
all times to its customers.
|
· |
The
Concessionaire must establish a complaint center and correction facilities
center. We are required to report to the Mexican Government on a
monthly
basis the complaints received and the actions taken to resolve the
problems.
|
· |
The
Concessionaire will only be authorized to invoice its customer’s tariffs
rates that have been approved by the Mexican
government.
|
· |
The
Concessionaire is required to provide audited financial statements
on a
yearly basis that includes a detailed description of the fixed assets
utilized in the network and accounting reporting by region and location
of
where the services are being provided.
|
· |
The
Concessionaire is required to provide quarterly reports and updates
on the
expansion of the network in Mexico and a description of the training
programs and research and development programs.
|
· |
The
Concessionaire is required to provide statistic reports of traffic,
switching capacity and other parameters in the
network.
|
(a) |
Market
for Common Equity
|
Fiscal
2004
|
High
|
Low
|
|||||
First Quarter
|
$
|
2.00
|
$
|
2.00
|
|||
Second
Quarter
|
$
|
1.00
|
$
|
1.00
|
|||
Third
Quarter
|
$
|
1.00
|
$
|
1.00
|
|||
Fourth
Quarter
|
$
|
6.00
|
$
|
1.25
|
|||
Fiscal
2005
|
High
|
Low
|
|||||
First Quarter
|
$
|
1.20
|
$
|
0.56
|
|||
Second
Quarter
|
$
|
1.25
|
$
|
0.48
|
|||
Third
Quarter
|
$
|
0.92
|
$
|
0.21
|
|||
Fourth
Quarter
|
$
|
0.32
|
$
|
0.16
|
(b) |
Holders
|
(c) |
Dividends
|
(d) |
Securities
issued under Equity Compensation
Plans
|
Plan
Category
|
Number
of Securities to be Issued upon Exercise of Outstanding Options,
Warrants
and Rights
|
Weighted-average
Exercise Price of Outstanding Options, Warrants and
Rights
|
Number
of Securities Remaining Available for Future Issuance Under Equity
Compensation Plans (excluding securities reflected in column
(a))
|
|||||||
(a)
|
(b)
|
(c)
|
||||||||
Equity
Compensation Plans Not
Approved
by Security Holders
|
303,140
|
|
$0.25
|
1,054,149
|
||||||
|
||||||||||
Total
|
303,140
|
|
$0.25
|
1,054,149
|
||||||
(e) |
Sales
of Unregistered Securities
|
|
Years
ended July 31,
|
||||||||||||
|
2005
|
2004
|
|||||||||||
|
$
|
%
|
$
|
%
|
|||||||||
Operating
revenues
|
|
|
|
|
|||||||||
Services
|
|
|
|
|
|||||||||
Carrier
services
|
$
|
5,782
|
96
|
%
|
$
|
1,020
|
81
|
%
|
|||||
Network
services
|
229
|
4
|
%
|
234
|
19
|
%
|
|||||||
Total
operating revenues
|
6,011
|
100
|
%
|
1,254
|
100
|
%
|
|||||||
Cost
of services (exclusive of depreciation and amortization, shown
below
|
5,664
|
94
|
%
|
1,071
|
85
|
%
|
|||||||
|
|||||||||||||
Gross
Margin
|
347
|
6
|
%
|
183
|
15
|
%
|
|||||||
|
|||||||||||||
Selling,
general and administrative Expense
|
517
|
9
|
%
|
584
|
47
|
%
|
|||||||
|
|||||||||||||
Legal
and professional fees
|
417
|
7
|
%
|
303
|
24
|
%
|
|||||||
|
|||||||||||||
Non-cash
issuance of common stock and warrants for services
|
1,047
|
17
|
%
|
7,055
|
563
|
%
|
|||||||
|
|||||||||||||
Non-cash
stock-based compensation, employees
|
474
|
8
|
%
|
–
|
0
|
%
|
|||||||
|
|||||||||||||
Impairment
expense
|
–
|
0
|
%
|
702
|
300
|
%
|
|||||||
|
|||||||||||||
Bad
debt expense
|
4
|
0
|
%
|
4
|
0
|
%
|
|||||||
|
|||||||||||||
Depreciation
and amortization
|
112
|
2
|
%
|
20
|
2
|
%
|
|||||||
|
|||||||||||||
Operating
loss
|
(2,224
|
)
|
-37
|
%
|
(8,485
|
)
|
-677
|
%
|
|||||
|
|||||||||||||
Debt
forgiveness income
|
460
|
8
|
%
|
257
|
0
|
%
|
|||||||
Gain
on disposal of investment
|
12,104
|
201
|
%
|
–
|
0
|
%
|
|||||||
Other
income (expense)
|
(44
|
)
|
-1
|
%
|
(241
|
)
|
-19
|
%
|
|||||
|
|||||||||||||
Net
income (loss)
|
10,296
|
171
|
%
|
(8,469
|
)
|
-675
|
%
|
||||||
|
|||||||||||||
Less:
preferred stock dividends
|
(709
|
)
|
-12
|
%
|
(306
|
)
|
-24
|
%
|
|||||
Net
income (loss) to applicable to common shareholders
|
$
|
9,587
|
159
|
%
|
($8,775
|
)
|
-700
|
%
|
· |
$103,454
owed to Attorneys for legal services rendered during fiscal 2004.
|
· |
$1,186,000
associated with the Series D Cumulative preferred stock. Of this
balance,
$942,000 is associated with the full redemption of this security
and
$244,000 is related to the accrued dividends as of July 31, 2005.
|
· |
$1,351,000
associated with the Series E Cumulative preferred stock. Of this
balance,
$1,058,000 is associated with the full redemption of this security
and
$293,000 is related to the accrued dividends as of July 31, 2005.
During
the fiscal year ended July 31, 2003, the Company was de-listed from
AMEX
and according to the terms of the Series E Cumulative preferred stock
Certificate of Designation, if the Company fails to maintain a listing
on
NASDAQ, NYSE or AMEX the Series E preferred stockholder could request
a
mandatory redemption of the total outstanding preferred stock. As
of the
date of this filing we have not received such redemption
notice.
On
October 31, 2002, we filed a lawsuit in the United States District
Court
for the Southern District Court of New York against several individuals
and financial institutions, including Rose Glen Capital and Shaar
Fund,
the holders of our Series D and E Redeemable Preferred Stock, for,
among
other things, stock fraud and manipulation. On February 25, 2005,
Judge
Lewis A. Kaplan issued a memorandum opinion and order dismissing
the
complaint as to defendants that included the holders of our Series
D and E
Redeemable Preferred Stock. We plan to appeal that decision once
a final
judgment has been entered. These liabilities combined for a total
of
approximately $2,537,000. Accounting rules dictate that these liabilities
must remain on our books under Current Liabilities until the lawsuit
is
resolved in the judicial system or otherwise. At this time we cannot
predict the outcome or the time frame for this to
occur.
|
Page
|
|
25
|
|
26
|
|
27
|
|
28
|
|
29
|
|
30
|
|
31
|
ATSI
COMMUNICATIONS, INC.
|
||||
AND
SUBSIDIARIES
|
||||
(in
thousands, except share
information)
|
July
31,
|
||||
2005
|
||||
ASSETS | ||||
CURRENT ASSETS: | ||||
Cash
and cash equivalents
|
$
|
29
|
||
Accounts
receivable
|
170
|
|||
Prepaid
& other current assets
|
44
|
|||
Total
current assets
|
243
|
|||
PROPERTY
AND EQUIPMENT
|
228
|
|||
Less
- Accumulated depreciation
|
(90
|
)
|
||
Net
property and equipment
|
138
|
|||
Total
assets
|
$
|
381
|
||
LIABILITIES
AND STOCKHOLDERS' DEFICIT
|
||||
CURRENT
LIABILITIES:
|
||||
Accounts
payable
|
604
|
|||
Accrued
liabilities
|
986
|
|||
Current
portion of obligation under capital leases
|
3
|
|||
Notes
payable
|
104
|
|||
Note
payable - related party
|
16
|
|||
Convertible
debentures
|
275
|
|||
Series
D Cumulative Preferred Stock, 3,000 shares authorized, 742 shares
issued
and outstanding
|
1,182
|
|||
Series
E Cumulative Preferred Stock, 10,000 shares authorized, 1,170 shares
issued and outstanding
|
1,345
|
|||
Liabilities
from discontinued operations, net of assets
|
1,152
|
|||
Total
current liabilities
|
5,667
|
|||
LONG-TERM
LIABILITIES:
|
||||
Notes
payable
|
500
|
|||
Obligation
under capital leases, less current portion
|
9
|
|||
Other
|
8
|
|||
Total
long-term liabilities
|
517
|
|||
Total
liabilities
|
6,184
|
|||
STOCKHOLDERS'
DEFICIT:
|
||||
Preferred
stock, $0.001 par value, 10,000,000 shares authorized
|
||||
Series
A Cumulative Convertible Preferred Stock, 50,000 shares authorized,
3,750
issued and outstanding
|
–
|
|||
Series
H Convertible Preferred Stock, 16,000,000 shares authorized,
13,912,372
issued and outstanding
|
14
|
|||
Common
stock, $0.001, 150,000,000 shares authorized, 10,397,222 issued
and
outstanding
|
10
|
|||
Additional
paid in capital
|
71,916
|
|||
Accumulated
deficit
|
(78,249
|
)
|
||
Other
comprehensive income
|
502
|
|||
Total
stockholders' deficit
|
(5,803
|
)
|
||
Total
liabilities and stockholders' deficit
|
$
|
381
|
||
See
accompanying summary of accounting policies and notes to financial
statements.
|
ATSI
COMMUNICATIONS, INC.
|
||||||
AND
SUBSIDIARIES
|
||||||
(In
thousands, except per share
amounts)
|
Years
ended July 31,
|
|||||||
2005
|
2004
|
||||||
OPERATING
REVENUES:
|
|||||||
Services
|
|||||||
Carrier
services
|
$
|
5,782
|
$
|
1,020
|
|||
Network
services
|
229
|
234
|
|||||
Total
operating revenues
|
6,011
|
1,254
|
|||||
OPERATING
EXPENSES:
|
|||||||
Cost
of services (exclusive of depreciation and amortization, shown
below)
|
5,664
|
1,071
|
|||||
Selling,
general and administrative
|
517
|
584
|
|||||
Legal
and professional fees
|
417
|
303
|
|||||
Non-cash
issuance of common stock and warrants for services
|
1,047
|
7,055
|
|||||
Non-cash
stock-based compensation, employees
|
474
|
–
|
|||||
Impairment
expense
|
–
|
702
|
|||||
Bad
debt expense
|
4
|
4
|
|||||
Depreciation
and amortization
|
112
|
20
|
|||||
Total
operating expenses
|
8,235
|
9,739
|
|||||
OPERATING
LOSS
|
(2,224
|
)
|
(8,485
|
)
|
|||
OTHER
INCOME (EXPENSE):
|
|||||||
Other
income (expense)
|
27
|
7
|
|||||
Debt
forgiveness income
|
460
|
257
|
|||||
Gain
on disposal of investment
|
12,104
|
0
|
|||||
Gain/(loss)
from sale of assets
|
–
|
25
|
|||||
Loss
on an unconsolidated affiliate
|
–
|
(107
|
)
|
||||
Interest
expense
|
(71
|
)
|
(166
|
)
|
|||
Total
other income
|
12,520
|
16
|
|||||
NET
INCOME (LOSS)
|
10,296
|
(8,469
|
)
|
||||
LESS:
PREFERRED DIVIDENDS
|
(709
|
)
|
(306
|
)
|
|||
NET
INCOME (LOSS) TO COMMON STOCKHOLDERS
|
$
|
9,587
|
($8,775
|
)
|
|||
BASIC
INCOME (LOSS) PER SHARE
|
$
|
1.34
|
($7.31
|
)
|
|||
DILUTED
INCOME (LOSS) PER SHARE
|
$
|
0.41
|
($7.31
|
)
|
|||
WEIGHTED
AVERAGE COMMON SHARES OUTSTANDING
|
7,128,847
|
1,199,892
|
|||||
See
accompanying summary of accounting policies and notes to financial
statements
|
ATSI
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
|||||
(In
thousands)
|
Years
ended July 31,
|
|||||||
2005
|
2004
|
||||||
Net
income (loss) to common stockholders
|
$
|
9,587
|
($8,775
|
)
|
|||
Foreign
currency translation adjustment
|
–
|
–
|
|||||
Comprehensive
income (loss) to common stockholders
|
$
|
9,587
|
($8,775
|
)
|
|||
See
accompanying summary of accounting policies and notes to financial
statements.
|
ATSI
COMMUNICATIONS, INC.
|
||||||||||||||||||||||||||||||||||
AND
SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||
(
in thousands)
|
Notes
|
Cumulative
|
Total
|
||||||||||||||||||||||||||||||||
Preferred
Stock (A)
|
Preferred
Stock (H)
|
Common
Stock
|
Additional
|
Accumulated
|
receivable
from
|
Translation
|
Stockholders'
|
|||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Shares
|
Amount
|
Paid
In Capital
|
Deficit
|
officers
|
Adjustment
|
(DEFICIT)
|
||||||||||||||||||||||||
BALANCE,
JULY 31, 2003
|
4
|
0
|
–
|
–
|
1,036,393
|
$
|
1
|
$
|
61,125
|
($80,076
|
)
|
$
|
0
|
$
|
502
|
(18,445
|
)
|
|||||||||||||||||
Shares
issued for services
|
929
|
1
|
861
|
862
|
||||||||||||||||||||||||||||||
Shares
issued for cash
|
567
|
1
|
5
|
6
|
||||||||||||||||||||||||||||||
Conversion
of redeemable preferred stock
|
401
|
0
|
313
|
313
|
||||||||||||||||||||||||||||||
Reincorporation
to Nevada
|
14,386
|
14
|
(14
|
)
|
(0
|
)
|
128
|
142
|
||||||||||||||||||||||||||
Dividends
declared
|
(306
|
)
|
(306
|
)
|
||||||||||||||||||||||||||||||
Warrant
expense
|
7,053
|
7,053
|
||||||||||||||||||||||||||||||||
Net
loss
|
(8,469
|
)
|
(8,469
|
)
|
||||||||||||||||||||||||||||||
BALANCE,
JULY 31, 2004
|
4
|
0
|
14,386
|
14
|
1,038,275
|
$
|
3
|
$
|
69,179
|
($88,545
|
)
|
$
|
0
|
$
|
502
|
(18,843
|
)
|
|||||||||||||||||
Shares
issued for services
|
1,417
|
1
|
606
|
607
|
||||||||||||||||||||||||||||||
Shares
issued to Purchase Assets
|
121
|
0
|
69
|
69
|
||||||||||||||||||||||||||||||
Shares
issued for P/S Conversion
|
(473
|
)
|
(0
|
)
|
473
|
0
|
0
|
0
|
||||||||||||||||||||||||||
Shares
issued for Debt Conversion
|
1,188
|
1
|
943
|
944
|
||||||||||||||||||||||||||||||
Exercise
of Warrants
|
4,280
|
4
|
914
|
918
|
||||||||||||||||||||||||||||||
Warrant
expense
|
872
|
872
|
||||||||||||||||||||||||||||||||
Dividends
declared
|
(709
|
)
|
(709
|
)
|
||||||||||||||||||||||||||||||
Option
Expense
|
42
|
42
|
||||||||||||||||||||||||||||||||
Net
income
|
10,296
|
10,296
|
||||||||||||||||||||||||||||||||
BALANCE,
JULY 31, 2005
|
4
|
0
|
13,912
|
14
|
1,045,754
|
$
|
10
|
$
|
71,916
|
($78,249
|
)
|
$
|
0
|
$
|
502
|
(5,803
|
)
|
|||||||||||||||||
See
accompanying summary of accounting policies and notes to financial
statements.
|
ATSI
COMMUNICATIONS, INC. AND SUBSIDIARIES
|
||||
(In
thousands)
|
Years
ended July 31,
|
|||||||
2005
|
2004
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
NET
INCOME (LOSS)
|
$
|
10,296
|
$
|
(8,469
|
)
|
||
Adjustments
to net income (loss):
|
|||||||
Gain
on disposal of investment
|
(12,104
|
)
|
|||||
Debt
forgiveness income
|
(460
|
)
|
(257
|
)
|
|||
Adjustments
to reconcile net loss to cash used in operating
activities:
|
|||||||
Impairment
Loss
|
–
|
702
|
|||||
Depreciation
and amortization
|
112
|
19
|
|||||
Loss
on an unconsolidated affiliate
|
–
|
107
|
|||||
Non-cash
issuance of stock grants and options, employees
|
474
|
–
|
|||||
Non-cash
issuance of common stock and warrants for services
|
1,047
|
7,055
|
|||||
Provision
for losses on accounts receivable
|
4
|
4
|
|||||
Changes
in operating assets and liabilities:
|
|||||||
Increase
in
|
|||||||
Accounts
receivable
|
(145
|
)
|
(21
|
)
|
|||
Prepaid
expenses and other
|
(18
|
)
|
(31
|
)
|
|||
Increase
/ (Decrease) in
|
|||||||
Accounts
payable
|
73
|
272
|
|||||
Accrued
liabilities
|
160
|
162
|
|||||
Net
cash used in operating activities
|
(561
|
)
|
(457
|
)
|
|||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchases
of property & equipment
|
(8
|
)
|
(130
|
)
|
|||
Cash
proceeds from sale of ATSICOM
|
–
|
187
|
|||||
Investment
in joint venture in ATSICOM
|
–
|
(47
|
)
|
||||
Acquisition
of business
|
(8
|
)
|
–
|
||||
Net
cash (used in) provided by investing activities
|
(16
|
)
|
10
|
||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Proceeds
from notes payable
|
918
|
410
|
|||||
Payments
on notes payable
|
(918
|
)
|
(9
|
)
|
|||
Proceeds
from the exercise of warrants
|
514
|
–
|
|||||
Principal
payments on capital lease obligation
|
(2
|
)
|
–
|
||||
Net
cash provided by financing activities
|
512
|
401
|
|||||
DECREASE
IN CASH
|
(65
|
)
|
(46
|
)
|
|||
CASH
AND CASH EQUIVALENTS, beginning of period
|
94
|
140
|
|||||
CASH
AND CASH EQUIVALENTS, end of period
|
$
|
29
|
$
|
94
|
|||
NON-CASH
TRANSACTIONS
|
|||||||
Issuance
of common stock for conversion of debt
|
$
|
890
|
–
|
||||
Issuance
of common stock for purchase of intangible assets
|
24
|
–
|
|||||
See
accompanying summary of accounting policies and notes to financial
statements.
|
Twelve
months ended July 31,
|
|||||||
2005
|
2004
|
||||||
Net
income (loss) to common shareholders, as reported
|
$
|
9,587,000
|
($8,775,000
|
)
|
|||
Add: stock based compensation determined under intrinsic value based method |
42,080
|
–
|
|||||
Less:
stock based compensation determined under fair value based
method
|
(1,000,493
|
)
|
–
|
||||
Pro
forma net income (loss)
|
$
|
8,628,587
|
($8,775,000
|
)
|
|||
Basic
net income (loss) per common share:
|
|||||||
As
reported
|
$
|
1.34
|
($7.31
|
)
|
|||
Pro
forma
|
$
|
1.22
|
($7.31
|
)
|
|||
Diluted
net income (loss) per common share:
|
|||||||
As
reported
|
$
|
0.41
|
($7.31
|
)
|
|||
Pro
forma
|
$
|
0.38
|
($7.31
|
)
|
For
the Years Ended July 31,
|
|||||||
2005
|
2004
|
||||||
Expected
dividends yield
|
0.00
|
%
|
0.00
|
%
|
|||
Expected
stock price volatility
|
297
|
%
|
248
|
%
|
|||
Risk-free
interest rate
|
3.5
|
%
|
2
|
%
|
|||
Expected
life of options
|
3
years
|
1-3
years
|
|||||
Depreciable
lives
|
July
31, 2005
|
||||||
Telecom
equipment & Software
|
1-5
years
|
$
|
228
|
||||
Less:
accumulated depreciation
|
(90
|
)
|
|||||
Net-property
and equipment
|
$
|
138
|
Origination
Date
|
Amount
|
Maturity
Date
|
|||||
August
23, 2004
|
$
|
25,000
|
August
23, 2005
|
||||
August
30, 2004
|
25,000
|
August
30, 2005
|
|||||
September
15, 2004
|
25,000
|
September
15, 2005
|
|||||
September
20, 2004
|
150,000
|
September
20, 2005
|
|||||
October
8, 2004
|
25,000
|
October
8, 2005
|
|||||
October
12, 2004
|
25,000
|
October
12, 2005
|
|||||
October
15, 2004
|
10,000
|
October
15, 2005
|
|||||
October
25, 2004
|
15,000
|
October
25, 2005
|
|||||
November
5, 2004
|
25,000
|
November
5, 2005
|
|||||
November
15, 2004
|
15,000
|
November
15, 2005
|
|||||
December
1, 2004
|
10,000
|
December
1, 2005
|
|||||
December
21, 2004
|
10,000
|
December
21, 2005
|
|||||
January
4, 2005
|
10,000
|
January
4, 2006
|
|||||
February
2, 2005
|
10,000
|
February
2, 2006
|
|||||
February
3, 2005
|
4,000
|
February
3, 2006
|
|||||
February
17, 2005
|
10,000
|
February
17, 2006
|
|||||
March
22, 2005
|
10,000
|
March
22, 2006
|
|||||
April
6, 2005
|
10,000
|
April
6, 2006
|
|||||
May
10, 2005
|
75,000
|
May
10, 2006
|
|||||
July
14, 2005
|
25,000
|
July
14, 2006
|
|||||
TOTAL
DURING FY2005:
|
$
|
514,000
|
Accounts
payable
|
$
|
7,496
|
||
Accrued
liabilities
|
2,015
|
|||
Notes
payable
|
386
|
|||
Capital
leases
|
2,207
|
|||
TOTAL
CURRENT LIABILITIES:
|
$
|
12,104
|
COMMON
SHARES
|
EXERCISE
PRICE
|
|||
2,000,000
|
$
|
0.01/share
|
||
800,000
|
$
|
0.25/share
|
||
850,000
|
$
|
0.50/share
|
||
250,000
|
$
|
0.75/share
|
Year
Ending July 31,
|
|||||||
2005
|
2004
|
||||||
Warrants
outstanding, beginning
|
19,874
|
45,088
|
|||||
Warrants
issued
|
–
|
–
|
|||||
Warrants
expired
|
(19,874
|
)
|
(25,214
|
)
|
|||
Warrants
exercised
|
–
|
–
|
|||||
Warrants
outstanding, ending
|
–
|
19,874
|
Years
Ended July 31,
|
|||||||||||||
1997
Stock Option Plan
|
2005
|
2004
|
|||||||||||
Options
|
Weighted
Average
Exercise
Price
|
Options
|
Weighted
Average
Exercise
Price
|
||||||||||
Outstanding,
|
|||||||||||||
Beginning
of year
|
–
|
$
|
–
|
20
|
$
|
58
|
|||||||
Granted
|
–
|
–
|
–
|
–
|
|||||||||
Exercised
|
–
|
–
|
–
|
–
|
|||||||||
Forfeited
|
–
|
–
|
(20
|
)
|
58
|
||||||||
Outstanding,
end of year
|
–
|
$
|
–
|
–
|
$
|
58
|
|||||||
Options
exercisable at end of year
|
|
|
(20
|
)
|
$
|
58
|
|||||||
Weighted
average fair value of options granted during the year
|
$
|
N/A
|
N/A
|
1998
Stock Option Plan
|
2005
|
2004
|
|||||||||||
Options
|
Weighted
Average
Exercise
Price
|
Options
|
Weighted
Average
Exercise
Price
|
||||||||||
Outstanding,
|
|||||||||||||
Beginning
of year
|
3,559
|
$
|
56
|
3,559
|
$
|
56
|
|||||||
Granted
|
–
|
–
|
–
|
–
|
|||||||||
Exercised
|
–
|
–
|
–
|
–
|
|||||||||
Forfeited
|
(3,559
|
)
|
56
|
–
|
–
|
||||||||
Outstanding,
end of year
|
–
|
$
|
–
|
3,559
|
$
|
56
|
|||||||
Options
exercisable at end of year
|
3,559
|
$
|
56
|
||||||||||
Weighted
average fair value of options granted during the year
|
$
|
N/A
|
N/A
|
||||||||||
2000
Stock Option Plan
|
2005
|
2004
|
|||||||||||
Options
|
Weighted
Average
Exercise
Price
|
Options
|
Weighted
Average
Exercise
Price
|
||||||||||
Outstanding,
|
|||||||||||||
Beginning
of year
|
28,767
|
$
|
48
|
38,100
|
$
|
45
|
|||||||
Granted
|
–
|
–
|
–
|
–
|
|||||||||
Exercised
|
–
|
–
|
–
|
–
|
|||||||||
Forfeited
|
(28,767
|
)
|
48
|
(9,333
|
)
|
48
|
|||||||
Outstanding,
end of year
|
–
|
$
|
–
|
28,767
|
$
|
48
|
|||||||
Options
exercisable at end of year
|
|
|
22,466
|
$
|
47
|
||||||||
Weighted
average fair value of options granted during the year
|
$
|
N/A
|
N/A
|
||||||||||
2004
Stock Option Plan
|
2005
|
2004
|
|||||||||||
Options
|
Weighted
Average
Exercise
Price
|
Options
|
Weighted
Average
Exercise
Price
|
||||||||||
Outstanding,
|
|||||||||||||
Beginning
of year
|
–
|
$
|
–
|
–
|
$
|
–
|
|||||||
Granted
|
3,004,000
|
0.46
|
57,786
|
0.95
|
|||||||||
Exercised
|
(900,000
|
)
|
0.46
|
(57,786
|
)
|
0.95
|
|||||||
Forfeited
|
–
|
–
|
–
|
–
|
|||||||||
Outstanding,
end of year
|
2,104,000
|
$
|
–
|
–
|
$
|
–
|
|||||||
Options
exercisable at end of year
|
1,328,000
|
$
|
0.46
|
–
|
$
|
–
|
|||||||
Weighted
average fair value of options granted during the year
|
$
|
0.46
|
$
|
0.95
|
|||||||||
2004
Stock Compensation Plan (WARRANTS)
|
2005
|
2004
|
|||||||||||
Warrants
|
Weighted
Average
Exercise
Price
|
Warrants
|
Weighted
Average
Exercise
Price
|
||||||||||
Outstanding,
|
|||||||||||||
Beginning
of year
|
3,333,426
|
$
|
0.25
|
–
|
$
|
–
|
|||||||
Granted
|
2,183,500
|
0.32
|
3,900,000
|
0.21
|
|||||||||
Exercised
|
(4,280,286
|
)
|
0.21
|
(566,574
|
)
|
0.21
|
|||||||
Forfeited
|
(933,500
|
)
|
0.56
|
–
|
–
|
||||||||
Outstanding,
end of year
|
303,140
|
$
|
0.25
|
3,333,426
|
$
|
0.25
|
|||||||
Warrants
exercisable at end of year
|
303,140
|
$
|
0.25
|
–
|
$
|
–
|
|||||||
Weighted
average fair value of warrants granted during the year
|
$
|
0.32
|
$
|
0.21
|
|||||||||
Options
and Warrants Outstanding
|
Options
and Warrants Exercisable
|
|||||||||||||||
Range
of Exercise Price
|
Number
Outstanding
|
Weighted
Average Exercise Price
|
Weighted
Average Remaining Contractual Life (Years)
|
Number
Exercisable
|
Weighted
Average Exercise Price
|
|||||||||||
Options
|
||||||||||||||||
$0.46
|
2,140,000
|
$
|
0.46
|
9.50
|
1,328,000
|
$
|
0.46
|
|||||||||
Warrants
|
||||||||||||||||
$0.25
|
303,140
|
$
|
0.25
|
0.80
|
303,140
|
$
|
0.25
|
|||||||||
Net
operating loss carry-forward
|
$
|
11,491,000
|
||
Valuation
allowance
|
(11,491,000
|
)
|
||
Total
deferred tax asset
|
$
|
–
|
Year
ended July 31,
|
|||||||
2005
|
2004
|
||||||
Net
income (loss) to be used to compute income (loss) per
share:
|
|||||||
Net
income (loss)
|
$
|
10,296,000
|
$
|
(8,469,000
|
)
|
||
Less
preferred dividends
|
(709,000
|
)
|
(306,000
|
)
|
|||
Net
income (loss) attributable to common Shareholders -
Basic
|
$
|
9,534,000
|
$
|
(8,775,000
|
)
|
||
Add
back preferred dividends
|
709,000
|
–
|
|||||
Net
income (loss) attributable to common shareholders -Diluted
|
$
|
10,296,000
|
$
|
(8,775,000
|
)
|
||
Weighted
average number of shares:
|
|||||||
Weighted
average common shares outstanding
|
7,128,847
|
1,199,892
|
|||||
Effect
of conversion of preferred shares
|
xxx
|
–
|
|||||
Effect
of warrants and options
|
xxx
|
–
|
|||||
Weighted
average common shares outstanding assuming dilution
|
xxx
|
1,199,892
|
|||||
Basic
income (loss) per common share
|
$
|
1.34
|
$
|
(7.31
|
)
|
||
Diluted
income (loss) per common share
|
$
|
0.45
|
$
|
(7.31
|
)
|
||
Name
|
Age
|
Position
Held
|
||
Arthur
L. Smith
|
40
|
President,
Chief Executive Officer and Director
|
||
Ruben
Caraveo
|
37
|
Vice
President, Sales and Operations
|
||
Antonio
Estrada
|
31
|
Corporate
Controller
|
||
John
R. Fleming
|
51
|
Interim
Executive Chairman of the Board
|
||
Murray
R. Nye
|
52
|
Director
|
||
Name
and Position
|
Number
of Transactions Not Reported
|
Number
of Reports Filed Late
|
Number
of Transactions Reported Late
|
|||||||
Arthur
L. Smith, President and Director
|
0
|
6
|
5
|
|||||||
Ruben
R. Caraveo, Vice President
|
0
|
7
|
6
|
|||||||
Antonio
Estrada, Controller
|
0
|
5
|
4
|
|||||||
John
R. Fleming
|
0
|
0
|
0
|
|||||||
Murray
R. Nye
|
0
|
0
|
0
|
|||||||
Annual
Compensation
|
Long-Term
Compensation
|
||||||||||||||||||||||||
Awards
|
Payouts
|
||||||||||||||||||||||||
Name
And Principal Position
|
Fiscal
Year
|
Salary
($)
|
Stock
Grant
($)
|
Other
Annual Compensation
($)(1)
|
Restricted
Stock
Awards
($)
|
Securities
Underlying
Options/
SARs
(#)
|
LTIP
Payout
($)
|
All
Other Compens-ation
($)
|
|||||||||||||||||
Arthur
L. Smith (2)
|
2005
|
$
|
128,000
|
$
|
31,500
|
–
|
–
|
$
|
193,200
(5
|
)
|
–
|
–
|
|||||||||||||
CEO
& President
|
2004
|
$
|
128,000
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||
Ruben
Caraveo (3)
|
2005
|
$
|
115,000
|
$
|
26,250
|
–
|
–
|
$
|
172,500
(5
|
)
|
–
|
–
|
|||||||||||||
Vice
President, Operations
|
2004
|
$
|
115,000
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||
Antonio
Estrada (4)
|
2005
|
$
|
80,000
|
$
|
26,250
|
–
|
–
|
$
|
159,620
(5
|
)
|
–
|
–
|
|||||||||||||
Corporate
Controller
|
2004
|
$
|
65,000
|
–
|
–
|
–
|
–
|
–
|
–
|
||||||||||||||||
(1) |
Certain
of the Company’s executive officers receive personal benefits in addition
to salary. The Company has concluded that the aggregate amount
of such
personal benefits does not exceed the lesser of $5,000 or 10% of
annual
salary and bonus for any Named Executive Officer.
|
(2) |
Mr.
Smith has served as CEO & President and Director of ATSI Nevada
(Formerly a Delaware Corp.) since May
2003
|
(3) |
Mr.
Caraveo has served as Vice President of Sales and Operations of
ATSI
Nevada since May 2003.
|
(4) |
Mr.
Estrada has served as Corporate Controller of ATSI Nevada since
May 2003.
|
(5) |
Stock
options granted during Fiscal 2005 have an exercise price of $0.46
|
Shares
Acquired
On
Exercise
|
Value
Realized
|
Number
of Securities Underlying Unexercised Options at
FYE(#)
|
Value
of Unexercised In-the-Money Options at FYE ($)
|
||||||||||||||||
Name
|
(#)
|
($)
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|||||||||||||
Arthur
L. Smith
|
–
|
–
|
272,000
|
148,000
|
–
|
–
|
|||||||||||||
Ruben
Caraveo
|
–
|
–
|
241,000
|
134,000
|
–
|
–
|
|||||||||||||
Antonio
Estrada
|
–
|
–
|
213,000
|
134,000
|
–
|
–
|
|||||||||||||
Shares
Acquired
On
Exercise
|
Value
Realized
|
Number
of Securities Underlying Unexercised Options at
FYE(#)
|
Value
of Unexercised In-the-Money Options at FYE ($)
|
||||||||||||||||
Name
|
(#)
|
($)
|
Exercisable
|
Unexercisable
|
Exercisable
|
Unexercisable
|
|||||||||||||
John
Fleming
|
–
|
–
|
175,000
|
100,000
|
–
|
–
|
|||||||||||||
Murray
Nye
|
–
|
–
|
175,000
|
100,000
|
–
|
–
|
|||||||||||||
|
|
|
SERIES
A
|
|
|
|
|||||||||||||
COMMON
|
%
OF
|
PREFERRED
|
%
OF
|
TOTAL
VOTING
|
%
OF
|
||||||||||||||
NAME
OF INDIVIDUAL OR GROUP
|
STOCK
|
CLASS
(1)
|
STOCK
|
CLASS
(2)
|
INTEREST
|
CLASS
(3)
|
|||||||||||||
|
|
||||||||||||||||||
5%
STOCKHOLDERS
|
|
||||||||||||||||||
|
|
||||||||||||||||||
Peter
Blindt
|
0
|
*
|
500
|
13.3
|
%
|
743
|
*
|
||||||||||||
30
E. Huron #5407
|
|||||||||||||||||||
Chicago,
IL 60611
|
|||||||||||||||||||
|
|||||||||||||||||||
Edward
Corcoran
|
0
|
*
|
500
|
13.3
|
%
|
743
|
*
|
||||||||||||
6006
W. 159th Street
|
|||||||||||||||||||
Bldg.
C 1-W
|
|||||||||||||||||||
Oak
Forest, IL 60452
|
|||||||||||||||||||
|
|||||||||||||||||||
Gerald
Corcoran
|
0
|
*
|
500
|
13.3
|
%
|
743
|
*
|
||||||||||||
11611
90th Avenue
|
|||||||||||||||||||
St.
John, IN 46373
|
|||||||||||||||||||
|
|||||||||||||||||||
Joseph
Migilio
|
0
|
*
|
500
|
23.0
|
%
|
743
|
*
|
||||||||||||
13014
Sandburg Ct.
|
|||||||||||||||||||
Palos
Park, IL 60464
|
|||||||||||||||||||
|
|||||||||||||||||||
Jeffrey
Tessiatore
|
0
|
*
|
500
|
13.3
|
%
|
743
|
*
|
||||||||||||
131
Settlers Dr.
|
|||||||||||||||||||
Naperville,
IL 60565
|
|||||||||||||||||||
|
|||||||||||||||||||
Albert
Vivo
|
0
|
*
|
500
|
13.3
|
%
|
743
|
*
|
||||||||||||
9830
Circle Parkway
|
|||||||||||||||||||
Palos
Park, IL 60464
|
|||||||||||||||||||
|
|||||||||||||||||||
Gary
Wright
|
0
|
*
|
750
|
20.0
|
%
|
1,115
|
*
|
||||||||||||
3404
Royal Fox Dr.
|
|||||||||||||||||||
St.
Charles, IL 60174
|
|||||||||||||||||||
|
|||||||||||||||||||
INDIVIDUAL
OFFICERS, DIRECTORS AND NOMINEES
|
|||||||||||||||||||
|
|||||||||||||||||||
Arthur
L. Smith
|
630,853
(4
|
)
|
5.4
|
%
|
0
|
*
|
630,853
(4
|
)
|
5.4
|
%
|
|||||||||
President,
Chief Executive Officer, Director
|
|||||||||||||||||||
|
|||||||||||||||||||
Antonio
Estrada
|
328,000
(5
|
)
|
2.83
|
%
|
*
|
328,000
(5
|
)
|
2.8
|
%
|
||||||||||
Corporate
Controller
|
|||||||||||||||||||
|
|||||||||||||||||||
Ruben
R. Caraveo
|
303,500
(6
|
)
|
2.62
|
%
|
0
|
*
|
303,500
(6
|
)
|
2.6
|
%
|
|||||||||
Vice
President, Sales and
Operations
|
|||||||||||||||||||
|
|||||||||||||||||||
John
R. Fleming
|
325,000
(7
|
)
|
2.80
|
%
|
0
|
*
|
325,000
(7
|
)
|
2.8
|
%
|
|||||||||
Director
|
|||||||||||||||||||
|
|||||||||||||||||||
Murray
R. Nye
|
325,000
(8
|
)
|
2.80
|
%
|
0
|
*
|
325,000
(8
|
)
|
2.8
|
%
|
|||||||||
Director
|
|||||||||||||||||||
ALL
OFFICERS AND DIRECTORS AS A GROUP
|
1,912,353
(9
|
)
|
18.4
|
%
|
0
|
*
|
1,912,353
(9
|
)
|
18.4
|
%
|
|||||||||
|
* |
Less
than 1%
|
(1) |
Based
on 11,593,222 shares of Common Stock outstanding as of July 31,
2005. Any
shares represented by options exercisable within 60 days
|
After July 31, 2005 are treated as being outstanding for the purpose of computing the percentage of class for such person but not for any other purpose |
(2) |
Based
on 3,750 shares of Series A Preferred Stock outstanding as of July
31,
2005.
|
(3) |
Based
on 11,593,222 shares of Common Stock outstanding as of July 31,
2005. Any
shares represented by options exercisable within 60 days
|
After July 31, 2005 are treated as being outstanding for the purpose of computing the percentage of class for such person but not for any other purpose |
(4) |
Includes
272,000 shares subject to options exercisable at July 31,
2005.
|
(5) |
Includes
213,000 shares subject to options exercisable at July 31,
2005.
|
(6) |
Includes
241,000 shares subject to options exercisable at July 31,
2005.
|
(7) |
Includes
175,000 shares subject to options exercisable at July 31,
2005.
|
(8) |
Includes
175,000 shares subject to options exercisable at July 31,
2005.
|
(9) |
Includes
1,076,000 shares subject to options exercisable at July 31,
2005.
|
(a) |
Exhibits.
The following documents are exhibits to this
report.
|
2.1
|
Plan
and Agreement of Merger of ATSI Communications, Inc. with and
into ATSI
Merger Corporation, dated as of March 24, 2004. (Exhibit 2.1
to Form 8-K
of ATSI filed on May 24, 2004)
|
|
|
3.1
|
Articles
of Incorporation of ATSI Merger Corporation. (Exhibit 3.1 to
Form 8-K of
ATSI filed on May 24, 2004)
|
3.2
|
Bylaws
of ATSI Merger Corporation. (Exhibit 3.2 to Form 8-K of ATSI
filed on May
24, 2004)
|
3.3
|
Articles
of Merger of ATSI Communications, Inc. with and into ATSI Merger
Corporation. (Exhibit 3.3 to Form 8-K of ATSI filed on May 24,
2004)
|
4.1
|
Securities
Purchase Agreement between The Shaar Fund Ltd. and ATSI dated
July 2, 1999
(Exhibit 10.33 to Registration statement on Form S-3 (No. 333-84115)
filed
August 18, 1999)
|
4.2
|
Common
Stock Purchase Warrant issued to The Shaar Fund Ltd. by ATSI
dated July 2,
1999 (Exhibit 10.35 to Registration statement on Form S-3 (No.
333-84115)
filed August 18, 1999)
|
4.3
|
Registration
Rights Agreement between The Shaar Fund Ltd. and ATSI dated July
2, 1999
(Exhibit 10.36 to Registration statement on Form S-3 (No. 333-84115)
filed
August 18, 1999)
|
4.4
|
Securities
Purchase Agreement between The Shaar Fund Ltd. and ATSI dated
September
24, 1999 (Exhibit 10.39 to Registration statement on Form S-3
(No.
333-84115) filed October 26, 1999)
|
4.5
|
Common
Stock Purchase Warrant issued to The Shaar Fund Ltd. by ATSI
dated
September 24, 1999 (Exhibit 10.41 to Registration statement on
Form S-3
(No. 333-84115) filed October 26, 1999)
|
4.6
|
Registration
Rights Agreement between The Shaar Fund Ltd. and ATSI dated September
24,
1999 (Exhibit 10.42 to Registration statement on Form S-3 (No.
333-84115)
filed October 26, 1999)
|
4.7
|
Form
of letter dated December 30, 1999 from H. Douglas Saathoff, Chief
Financial Officer of American TeleSource International, Inc.
to holders of
Convertible Notes (Exhibit 4.1 to Registration statement on Form
S-3 (No.
333-35846) filed April 28, 2000
|
4.8
|
Form
of letter dated January 24, 2000 from H. Douglas Saathoff, Chief
Financial
Officer of American TeleSource International, Inc. to holders
of
Convertible Notes (Exhibit 4.2 to Registration statement on Form
S-3 (No.
333-35846) filed April 28, 2000)
|
4.9
|
Registration
Rights Agreement between American TeleSource International, Inc.
and Kings
Peak, LLC dated February 4, 2000 (Exhibit 4.4 to Registration
statement on
Form S-3 (No. 333-35846) filed April 28, 2000)
|
4.10
|
Form
of Convertible Note for $2.2 million principal issued March 17,
1997
(Exhibit 4.5 to Registration statement on Form S-3 (No. 333-35846)
filed
April 28, 2000)
|
4.11
|
Form
of Modification of Convertible Note (Exhibit 4.6 to Registration
statement
on Form S-3 (No. 333-35846) filed April 28, 2000)
|
4.12
|
Promissory
Note issued to Four Holdings, Ltd. dated October 17, 1997 (Exhibit
4.7 to
Registration statement on Form S-3 (No. 333-35846) filed April
28,
2000)
|
4.13
|
Securities
Purchase Agreement between The Shaar Fund Ltd. and ATSI dated
February 22,
2000 (Exhibit 4.5 to Registration statement on Form S-3 (No.
333-89683)
filed April 13, 2000)
|
4.14
|
Common
Stock Purchase Warrant issued to The Shaar Fund Ltd. by ATSI
dated
February 22, 2000 (Exhibit 4.7 to Registration statement on Form
S-3 (No.
333-89683) filed April 13, 2000)
|
4.15
|
Common
Stock Purchase Warrant issued to Corporate Capital Management
LLC by ATSI
dated February 22, 2000 (Exhibit 4.8 to Registration statement
on Form S-3
(No. 333-89683) filed April 13, 2000)
|
4.16
|
Registration
Rights Agreement between The Shaar Fund Ltd. and ATSI dated February
22,
2000 (Exhibit 4.9 to Registration statement on Form S-3 (No.
333-89683)
filed April 13, 2000)
|
4.17
|
Securities
Purchase Agreement between ATSI and RGC International Investors,
LDC dated
October 11, 2000 (Exhibit 10.1 to Form 8-K filed October 18,
2000)
|
4.18
|
Registration
Rights Agreement between ATSI and RGC International Investors,
LDC dated
October 11, 2000 (Exhibit 10.5 to Form 8-K filed October 18,
2000)
|
4.19
|
Stock
Purchase Warrant between ATSI and RGC International Investors,
LDC dated
October 11, 2000 (Exhibit 10.6 to Form 8-K filed October 18,
2000)
|
4.20
|
Securities
Purchase Agreement between ATSI and “Buyers” dated March 21, 2001(Exhibit
4.31 to Annual Report on Form 10-K for the year ended July
31, 2001 filed
October 30, 2001)
|
4.21
|
Stock
Purchase Warrant between ATSI and “Buyers” dated March 23, 2001 (Exhibit
4.32 to Annual Report on Form 10-K for the year ended July
31, 2001 filed
October 30, 2001)
|
4.22
|
Securities
Purchase Agreement between ATSI and “Buyers” dated March 21, 2001(Exhibit
4.34 to Annual Report on Form 10-K for the year ended July
31, 2001 filed
October 30, 2001
|
4.23
|
Stock
Purchase Warrant between ATSI and “Buyers” dated March 21, 2001 (Exhibit
4.35 to Annual Report on Form 10-K for the year ended July
31, 2001 filed
October 30, 2001)
|
4.24
|
Convertible
Debenture Agreement (Exhibit 4.37 to Annual Report on Form
10-K for the
year ended July 31, 2003 filed November 12, 2003)
|
4.25
|
Convertible
Promissory Notes issued to Recap Marketing & Consulting, LLP. (Exhibit
4.1 to Form 10-QSB for the period Ended October 31, 2004 filed
December
15, 2004)
|
4.26
|
Convertible
Promissory Notes issued to Recap Marketing & Consulting, LLP. (Exhibit
4.1 to form 10-QSB for the period Ended January 31, 2005 filed
March 15,
2005)
|
4.27
|
Convertible
Promissory Note issued to Franklin Cardwell and Jones, PC.
dated November
1, 2004 (Exhibit 4.2 to form 10-QSB for the period Ended January
31, 2005
filed March 15, 2005)
|
4.28
|
Convertible
Promissory Notes issued to Recap Marketing & Consulting, LLP. (Exhibit
4.1 to form 10-QSB for the period Ended April 30, 2005 filed
June 14,
2005)
|
4.29
|
Convertible
Promissory Notes issued to Recap Marketing & Consulting, LLP. (Exhibit
4.1 to form 10-QSB for the period Ended July 31, 2005 filed
October 24,
2005)*
|
10.1
|
American
TeleSource International, Inc. 1998 Stock Option Plan (Exhibit
4.7 to
Registration statement on Form S-8 filed January 11,
2000)
|
10.2
|
2000
Option Plan (Exhibit 4.36 to annual Report on Form 10-K for
the year ended
July 31, 2003 filed November 12. 2000.)
|
10.3
|
Agreement
with SATMEX (Agreement #095-1) (Exhibit 10.31 to Annual Report
on Form
10-K for year ended July 31, 1998 (No. 000-23007))
|
10.4
|
Agreement
with SATMEX (Agreement #094-1) (Exhibit 10.32 to Annual Report
on Form
10-K for year ended July 31, 1998 (No. 000-23007))
|
10.5
|
Amendment
to Agreement #094-1 with SATMEX (Exhibit 10.3 to Amended Annual
Report on
Form 10-K for year ended July 31, 1999 filed August 25, 2000)
|
10.6
|
Amendment
to Agreement #095-1 with SATMEX (Exhibit10.4 to Amended Annual
Report on
Form 10-K for year ended July 31, 1999 filed August 25, 2000)
|
10.7
|
Bestel
Fiber Lease (Exhibit 10.5 to Amended Annual Report on Form
10-K for year
ended July 31, 1999 filed April 14, 2000)
|
10.8
|
Addendum
to Fiber Lease with Bestel, S.A. de C.V. (Exhibit 10.6 to
Amended Annual
Report on Form 10-K for year ended July 31, 1999 filed August
25, 2000)
|
10.9
|
Commercial
Lease with BDRC, Inc (Exhibit 10.24 to Annual Report on Form
10-K for year
ended July 31, 2003 filed November 12, 2003)
|
10.10
|
Stock
Purchase Agreement with Telemarketing (Sale of ATSICOM) (Exhibit
10.1 to
Form 8-K filed June 16, 2003)
|
10.11
|
Interconnection
Agreement TELMEX and ATSICOM (English summary) (Exhibit 10.26
to Annual
Report on Form 10-K for year ended July 31, 2003 filed November
12,
2003)
|
10.12
|
Interconnection
Agreement TELMEX and ATSICOM (English Translation) (Exhibit
10.27 to
Amended Annual Report on Form 10-K/A for the year ended July
31, 2003
filed March 2, 2004)
|
10.13
|
Carrier
Service Agreement DialMex and ATSI (Exhibit 10.27 to Annual
Report on Form
10-K for year ended July 31, 2003 filed November 12, 2003)
|
10.14
|
Confidential
Settlement Agreement and Mutual Release, Note Payable and
Lock out
agreement between ATSI and Alfonso Torres Roqueni, dated
October 1, 2004.
(Exhibit 10.1 to Form 10-QSB for the quarter ended October
31, 2004 filed
December 15, 2004)
|
10.15
|
Extension
to consulting agreements with Hunter M. A. Carr and Donald
W. Sapaugh
dated November 1, 2004. (Exhibit 10.1 to Form 10-QSB for
the quarter ended
January 31, 2005 filed March 15, 2005)
|
10.16
|
Extension
of consulting agreements (Amendment No: 1) with Hunter M.
A. Carr and
Donald W. Sapaugh dated March 1, 2005. (Exhibit 10.1 to Form
10-QSB for
the quarter ended April 30, 2005 filed June 14, 2005)
|
10.17
|
Settlement
Agreement (at mediation) with James C. Cuevas, Raymond G.
Romero, Texas
Workforce Commission and ATSI-Texas dated March 28, 2005.
(Exhibit 10.2 to
Form 10-QSB for the quarter ended April 30, 2005 filed June
14, 2005)
|
10.18
|
Order
granting Joint Motion to dismiss all claims against ATSI
Communications,
Inc. (A Nevada Corp., formerly a Delaware Corp.) by Helen
G. Schwartz,
Chapter 7 Trustee for TeleSpan, Inc. dated August 29, 2005.
(Exhibit 10.18
to annual report Form 10-KSB for the year ended July 31,
2005 filed
October 18, 2005)*
|
10.19
|
Agreement
of compromise, settlement and release between ATSI Communications,
Inc.
and Vianet, Inc. dated August 10, 2005. (Exhibit 10.19 to
annual report
Form 10-KSB for the year ended July 31, 2005 filed October
18, 2005)
*
|
10.20
|
Mutual
release and Termination Agreement between Hunter M. A. Carr
and Donald W.
Sapaugh and ATSI Communciations, Inc. dated June 1, 2005.
(Exhibit 10.20
to annual report Form 10-KSB for the year ended July 31,
2005 filed
October 18, 2005)*
|
21
|
Subsidiaries
of ATSI (Exhibit 21 to Annual Report on Form 10-K for year
ended July 31,
2004 filed November 9, 2004)
|
31.1
|
Certification
of our President and Chief Executive Officer, under Section
302 of the
Sarbanes-Oxley Act of 2002. *
|
31.2
|
Certification
of our Corporate Controller and Principal Financial Officer,
under Section
302 of the Sarbanes-Oxley Act of 2002. *
|
32.1
|
Certification
of our President and Chief Executive Officer, under Section
906 of the
Sarbanes-Oxley Act of 2002. *
|
|
|
32.2
|
Certification
of our Corporate Controller and Principal Financial Officer,
under Section
906 of the Sarbanes-Oxley Act of 2002. *
|
99.1
|
FCC
Radio Station Authorization - C Band (Exhibit 10.10 to Registration
statement on Form S-4 (No. 333-05557) filed June 7,
1996)
|
99.2
|
FCC
Radio Station Authorization - Ku Band (Exhibit 10.11 to Registration
statement on Form 10 (No. 333-05557) filed June 7,
1996)
|
99.3
|
Section
214 Certification from FCC (Exhibit 10.12 to Registration
statement on
Form 10 (No. 333-05557) filed June 7, 1996)
|
99.4
|
Comercializadora
License (Payphone License) issued to ATSI-Mexico (Exhibit
10.24 to
Registration statement on Form 10 (No. 000-23007) filed August
22,
1997)
|
99.5
|
Network
Resale License issued to ATSI-Mexico (Exhibit 10.25 to Registration
statement on Form 10 (No. 000-23007) filed August 22,
1997)
|
99.6
|
Shared
Teleport License issued to Sinfra (Exhibit 99.7 to Amended
Annual Report
on Form 10-K for year ended July 31, 1999 filed April 14,
2000)
|
99.7
|
Packet
Switching Network License issued to SINFRA (Exhibit 10.26
to Registration
statement on Form 10 (No. 000-23007) filed August 22,
1997)
|
99.8
|
Value-Added
Service License issued to SINFRA (Exhibit 99.9 to Amended
Annual Report on
Form 10-K for year ended July 31, 1999 filed April 13, 2000)
|
99.9
|
Public
Utility Commission of Texas ("PUC") approval of transfer
of the Service
Provider Certificate of Authority ("SPCOA") from Hinotel,
Inc. to ATSI's
subsidiary, Telefamilia Communications, Inc. Dated October
25, 2004.
(Exhibit 99.1 on Form 10-QSB for the quarter ended October
31, 2004 filed
December 15,
2004)
|
(b) |
Reports
on Form 8-K
|
No reports on Form 8-K were filed during the last quarter of the period covered by this report |
Year
Ended July 31,
|
|||||||
Description
of Fees
|
2005
|
2004
|
|||||
Audit
Fees
|
$
|
29,000
|
$
|
14,000
|
|||
Audit
Related Fees
|
-0-
|
-0-
|
|||||
Tax
Fees
|
-0-
|
-0-
|
|||||
All
Other Fees
|
-0-
|
-0-
|
ATSI COMMUNICATIONS, INC. | ||
|
|
|
By: | /s/ Arthur L. Smith | |
|
||
Arthur
L. Smith
President and Chief Executive
Officer
|
Signature
|
Title
|
Date
|
||
/s/
Arthur L. Smith
|
Principal
Executive Officer and Director
|
November
2, 2005
|
||
Arthur
L. Smith
|
||||
/s/
Antonio Estrada
|
Principal
Accounting Officer
|
November
2, 2005
|
||
Antonio
Estrada
|
Principal
Finance Officer
|
|||
/s/
John R. Fleming
|
Director
|
November
2, 2005
|
||
John
R. Fleming
|
||||
/s/
Murray R. Nye
|
Director
|
November
2, 2005
|
||
Murray
R. Nye
|