Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT PURSUANT
TO
SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of Earliest Event Reported) October
30, 2006
ATSI
Communications, Inc.
(Exact
Name of Registrant as Specified in Its Charter)
Nevada
(State
or
Other Jurisdiction of Incorporation
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1-15687
(Commission
File Number)
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74-2849995
(I.R.S.
Employer Identification No.)
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3201
Cherry Ridge, Building C,
Suite
300
San
Antonio, Texas
(Address
of Principal Executive Offices)
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78230
(Zip
Code)
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(210)
614-7240
(Registrant’s
Telephone Number, Including Area Code)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
]
Written communications pursuant to Rule 425 under the Securities
Act.
[
]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act
[
]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
[
]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
Item
4.02. Non-reliance on Previously Issued Financial Statements or a Related Audit
Report or Completed Interim Review.
We
recently evaluated the liability for the provisions for liquidation preferences
contained in our Series E Preferred Stock instruments. Based on our evaluation
we determined that the obligation
to the holders of our Series E Preferred Stock was incorrectly accounted for
as
dividend expense. As a result, our board of directors determined on October
30,
2006 that the previously issued audited financial statements for the year ended
July 31, 2005, interim financial statements for the three months ended October
31, 2005, interim financial statements for the three and six months ended
January 31, 2006, and interim financial statements for the three and nine months
ended April 30, 2006 should not be relied upon. We have reversed this accrued
dividend expense that resulted in a $340,000 improvement to net income for
the
periods restated.
Management
has
reviewed the accounting treatment of the provisions
for liquidation preferences contained in the Company’s
Series E
Preferred Stock instruments with
the
Company’s independent accountants. The Company’s Annual Report on Form 10-KSB
for the fiscal year ended July 31, 2006 filed on October 30, 2006 restates
the
affected financial statements previously filed with the Securities and Exchange
Commission.
ATSI
has
changed its internal controls to require that all provisions
for liquidation preferences contained
in its
Preferred
Stock instruments be reviewed
quarterly. The Company will determine whether additional disclosure relating
to
all provisions
for liquidation preferences in its Preferred Stock instruments is
required at the end of each fiscal quarter.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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ATSI
Communications, Inc.
Dated:
October 30, 2006
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By: |
/s/ Antonio
Estrada |
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Antonio
Estrada
Corporate
Controller
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