<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
----------------------------------
Washington, D.C. 20549
-----------------------
FORM 10-K/A NUMBER 1
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended July 31, 2000
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:
AMERICAN TELESOURCE
INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 74-2849995
(State of Incorporation) (I.R.S. Employer
Identification No.)
6000 Northwest Parkway, Suite 110
San Antonio, Texas
(Address of Principal 78249
Executive Office) (Zip Code)
(210) 547-1000
(Registrant's Telephone Number, Including Area Code)
Securities Registered Pursuant to Section 12(b) of the Act:
None
Securities Registered Pursuant to Section 12(g) of the Act:
Common Stock, Par Value $0.001 Per Share
(Title of Class)
_______________________
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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
---------
Form 10-K or any amendment to this Form 10-K. [_]
The aggregate market value of the Registrant's outstanding Common Stock
held by non-affiliates of the Registrant at November 9, 2000, was approximately
$10,500,000. There were 67,986,944 shares of Common Stock outstanding at
November 9, 2000, and the closing sales price on the AMEX for our Common Stock
was $1.50 on such date.
<PAGE>
Explanatory Note
This Form 10-K/A Number 1 is being filed in order to include the
information required by Items 10 - 13 originally intended to be incorporated by
reference to the information to be included in the Company's Proxy Statement of
the 2000 Annual Meeting of Stockholders.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors and Executive Officers
The following table sets forth certain information concerning the
current directors and executive officers of the Company:
Name Age Position Held
---- --- -------------
Arthur L. Smith 36 Chief Executive Officer and Chairman of
the Board of Directors
Charles R. Poole 57 President
H. Douglas Saathoff 38 Chief Financial Officer, Senior
Executive Vice President and Treasurer
K. Earl Posey 57 Senior Vice President, Human Resources
and Administration
J. Christopher Cuevas 35 Vice President, Corporate Controller
Karen R. Mella 42 Vice President, Investor Relations and
Corporate Communications
Raymond G. Romero 46 Vice President, General Counsel and
Corporate Secretary
Sandra Poole-Christal 34 President of GlobalSCAPE, Inc.
Jesus Enriquez 48 Senior Vice President, Director
General, ATSI-Mexico
Murray R. Nye 48 Director
Tomas Revesz 63 Director
Richard C. Benkendorf 61 Director
Carlos K. Kauachi 60 Director
Arthur L. Smith has served as Chief Executive Officer and a director of the
Company since its formation in June 1996 and served as President of the Company
since its formation in June 1996 to July 1998. Mr. Smith also served as
President, Chief Operating Officer and a director of ATSI-Canada since its
formation in May 1994. From December 1993 until May 1994, Mr. Smith served in
the same positions with Latcomm International Inc., which company amalgamated
with Willingdon Resources Ltd. to form ATSI-Canada in May 1994. Mr. Smith has
also served as President and Chief Executive Officer of American TeleSource
International, Inc., a Texas corporation ("ATSI-Texas"), one of the Company's
principal operating subsidiaries, since December 1993. From June 1989 to
December 1993, Mr. Smith was employed as director of international sales by
GeoComm Partners, a satellite-based telecommunications company located in San
Antonio, providing telecommunications services to Latin America. Mr. Smith has
over ten years experience in the telecommunications industry.
Charles R. Poole resigned as President of the Company effective July 31,
2000. Mr. Poole served as President of the Company from July 1998 to July 2000
and served as Chief Operating Officer of the Company from December 1997 to July
1998. Mr. Poole served as Vice President of the Company from February 1997 to
December 1997. Mr. Poole has also served as Senior Vice President-Sales and
Marketing of ATSI-Texas since February 1997. From February 1995 to January 1997,
Mr. Poole served as Senior Vice President for A+ Communications, responsible for
paging, cellular and telemessaging sales. From April 1994 to February 1995, Mr.
Poole served as Senior Vice President of American Paging, a communications
company. Mr. Poole has over fifteen years experience in the telecommunications
industry. Mr. Poole is the father of Sandra Poole-Christal, President of the
Company's subsidiary, GlobalSCAPE, Inc.
2
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H. Douglas Saathoff, C.P.A., has served as Senior Executive Vice President
of the Company since July 2000. Mr. Saathoff has served as Treasurer and Chief
Financial Officer of the Company since its formation in June 1996. Mr. Saathoff
also served as Secretary and Senior Vice President of the Company from June 1996
to July 2000. Mr. Saathoff also served as Vice President, Chief Financial
Officer and Treasurer of ATSI-Canada since February 1996 and Secretary since
June 1996. Mr. Saathoff has served as Vice President-Finance of ATSI-Texas since
June 1994 and as Secretary and Treasurer of ATSI-Texas since October 1994. Prior
to joining the Company, Mr. Saathoff served in various accounting roles
including Financial Reporting Manager for U.S. Long Distance Corp., a San
Antonio-based, publicly traded long distance telecommunications company and as
an accountant with Arthur Andersen LLP for five years.
K. Earl Posey has served as Senior Vice President, Human Resources since
January 2000. From January 1999 to December 1999, Mr. Posey served as an
instructor at Belmont and Vanderbilt University. Mr. Posey served as
Vice-President Human Resources for PMT Services, Inc. a Nashville-based
telecommunications company from April 1997 to December 1998. Prior to that time,
he served as Vice-President, Human Resources with A+ Communications from January
1993 to April 1997. Mr. Posey previously held positions in human resources and
manufacturing with Nortel Networks, Inc., Black and Decker Manufacturing Company
and ITT Telecommunications as well.
J. Christopher Cuevas, C.P.A, has served as Vice President, Corporate
Controller since April 2000. Mr. Cuevas served as Corporate Controller from
August 1998 to April 2000. From December 1994 to August 1998, he served in
various roles within the Company including Manager of Financial Reporting and
Director of Reporting. From January 1991 to November 1994, Mr. Cuevas served as
Manager of Financial Reporting for Eastex Energy, Inc. a Houston-based, publicly
traded energy company. Prior to that time, Mr. Cuevas served in several
accounting roles including two years as an accountant with Price Waterhouse.
Karen R. Mella, has served as ATSI's Vice President, Investor Relations and
Corporate Communications since April 2000. In addition, Ms. Mella served as
Director of Investor Relations from January 1997 to April 2000. From October
1995 to February 1997, she served as Director of Investor Relations for USLD
Communications, Inc., a San Antonio-based long distance communications company,
publicly traded on Nasdaq. Prior to that time, Ms. Mella was the Manager of
Investor Relations for Titan Holdings, Inc., a San Antonio-based property and
casualty insurance company, publicly traded on the NYSE.
Raymond G. Romero, has served as Vice President, General Counsel and
Corporate Secretary since July 2000. From October 1999 through April 2000, Mr.
Romero was employed as Vice President, Business Development for Open World
Communications, Inc. and from April 1999 through September 1999, he was employed
as President of Eurotech International, Inc., both Internet companies. Prior to
that time he served in a variety of roles including serving as a Partner with
Competitive Strategies Group, Ltd., a telecommunications consulting firm from
April 1997 through April 1999 and as Vice President and General Counsel for
Ameritech International, an international telecommunications company, from April
1991 through December 1995.
Sandra Poole-Christal has served as President of GlobalSCAPE, Inc. since
January 1, 1998. Ms. Poole-Christal founded GlobalSCAPE, Inc. in 1996 at the
request of the Company. Ms. Poole-Christal was one of the founding employees of
the Company, serving as its Director of International Sales and Marketing from
January 1994 until April 1996. Prior to joining the Company, Ms. Poole-Christal
served as an account executive with GeoComm Partners. Ms. Poole-Christal holds a
BA in Communications from Baylor University. Ms. Poole-Christal is the daughter
of Charles R. Poole, who was President of the Company until July 31, 2000.
Jesus Enriquez has served as Senior Vice President of the Company since
February 1998, and as Director General of American TeleSource International de
Mexico, S.A. de C.V. (ATSI-Mexico), one of the Company's principal operating
subsidiaries, since August 1996. From March 1995 to July 1996 Mr. Enriquez
served as Commercial Director of ATSI-Mexico. From January 1989 to February
1995, Mr. Enriquez was the Director
3
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General of Servicios Espectro Radioelectricos ("SERSA"), an international
communications company in Mexico City.
Murray R. Nye has served as a director of the Company since its formation
in June 1996. Mr. Nye also served as Chief Executive Officer and a director of
ATSI-Canada from its formation in May 1994. From December 1993 until May 1994,
Mr. Nye served in the same positions with Latcomm International Inc., which
company amalgamated with Willingdon Resources Ltd. to form ATSI-Canada in May
1994. From 1992 to 1995, Mr. Nye served as President of Kirriemuir Oil & Gas
Ltd. From 1989 until 1992, Mr. Nye was self-employed as a consultant and Mr. Nye
is again currently self-employed as a consultant. Mr. Nye serves as a director
of D.M.I. Technologies, Inc., an Alberta Stock Exchange-traded company.
Tomas Revesz has served as a director of the Company since its formation in
June 1996. Mr. Revesz has served as President of Long Distance International,
Inc., a long distance reseller, since October 1993. From 1983 to June 1993, Mr.
Revesz served as President of Star Long Distance, Inc., also a long distance
reseller. From January 1990 until August 1993, Mr. Revesz served as Vice
President of Operations of AAA Telephone & Communications, Inc., a telephone
interconnection company.
Richard C. Benkendorf has served as a director of the Company since October
1996. From 1991 to present, Mr. Benkendorf has been a principal of Technology
Impact Partners, which provides advisory and investment services. From
1989-1991, Mr. Benkendorf served as Senior Vice President Investment, Planning,
Mergers & Acquisitions and Venture Capital for Ameritech, a communications
services company.
Carlos K. Kauachi has served as a director of the Company since October
1996. From 1996 to present, Mr. Kauachi has been self-employed as a consultant.
From 1962 until 1996, Mr. Kauachi served in various positions with Telefonos de
Mexico; the then privately owned telecommunications monopoly in Mexico,
including Vice President-Telephone Business Development, Vice
President-Marketing and Sales and, most recently, Vice President-International
Business Development.
Number and Classification of Directors
Our Amended and Restated Articles of Incorporation provide that the number
of directors shall be determined by resolution of the Board of Directors. The
Board of Directors has by resolution determined that the number of directors of
ATSI shall be six, with such directors being divided into three classes. The
members of the Board are divided into three classes: Class A, Class B and Class
C, with each class serving a staggered three-year term.
As a result of the resignation of Robert B. Werner as a director of the
Company in November 2000, there are currently five directors. Mr. Smith serves
in a class having a term that expires in 2001. Messrs. Kauachi and Revesz have
terms which expire in 2002 and Messrs. Benkendorf and Nye have terms which
expire in 2003.
Meetings and Committees of the Board
The Board of Directors of the Company held a total of 17 meetings during
the fiscal year ended July 31, 2000. The Compensation Committee, composed of
Messrs. Nye, Benkendorf and Kauachi, reviews and makes recommendations to the
Board of Directors regarding executive compensation matters and administers the
Company's stock option plans. The Audit Committee, composed of Messrs.
Benkendorf and Revesz, is responsible for reviewing the Company's financial
statements and overseeing the Company's accounting practices and audit
procedures. The functions of a nominating committee are performed by the full
Board. The Compensation Committee and the Audit Committee held four and seven
meetings, respectively, during the fiscal year ended July 31, 2000. No incumbent
director of the Company during the fiscal year ended July 31, 2000 attended
fewer than 75% of the aggregate number of meetings of the Board on which the
director served.
4
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information concerning the compensation
earned during the Company's last three fiscal years by the Company's Chief
Executive Officer and each of the Company's other four most highly compensated
executive officers whose total cash compensation exceeded $100,000 for services
rendered in all capacities for the fiscal years ended July 31, 2000
(collectively, the "Named Executive Officers").
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
-----------------------------------------------------------------------------------
Awards Payouts
-------------------------------------
Other Securities
Annual Restricted Underlying LTIP All Other
Fiscal Compensation Stock Options/ Payout Compensation
Name And Principal Position Year Salary ($) Bonus ($) ($)(1) Awards ($) SARs (#) ($) ($)
--------------------------- ---- ---------- --------- ------ ---------- -------- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Arthur L. Smith(2)........ 2000 $124,915 $ 4,500 - - - - -
Chief Executive Officer 1999 129,519 - - - 200,000 - -
1998 96,731 10,634 - - - - -
Charles R. Poole(3) ...... 2000 117,231 - - - - - -
President 1999 126,442 - - - 150,000 - -
1998 95,808 2,474 - - 50,000 - -
H. Douglas Saathoff(4).... 2000 99,163 4,500 - - - - -
Chief Financial Officer, 1999 102,244 - - - 100,000 - -
Senior Executive Vice 1998 91,394 13,631 - - - - -
President and Treasurer
Sandra Poole-Christal..... 2000 131,421 59,680 - - - - -
President, GlobalSCAPE 1999 80,000 40,000 - - 75,000 - -
1998 73,423 31,000 - - - - -
</TABLE>
(1) Certain of the Company's executive officers receive personal benefits in
addition to salary; however, the Company has concluded that the aggregate
amount of such personal benefits do not exceed the lesser of $50,000 or 10%
of annual salary and bonus for any Named Executive Officer.
(2) Also serves as Chief Executive Officer of American TeleSource
International, Inc., a Texas corporation ("ATSI-Texas"), the Company's
principal operating subsidiary. Mr. Smith's compensation is paid by
ATSI-Texas.
(3) Mr. Poole resigned effective July 31, 2000. Also served as President of
ATSI-Texas. Mr. Poole's compensation was paid by ATSI-Texas.
(4) Also serves as Vice President-Finance and Secretary and Treasurer of
ATSI-Texas. Mr. Saathoff's compensation is paid by ATSI-Texas.
Employment Agreements
The Company has entered into employment agreements with certain of its
executive officers as follows:
<TABLE>
<CAPTION>
Name Term Minimum
Annual Salary
<S> <C> <C>
Sandra Poole-Christal(1) January 1, 1998-December 31, 2001(2) 80,000 (3)
</TABLE>
5
<PAGE>
Arthur L. Smith August 1, 1998 - July 31, 2001(2) $130,000(4)
H. Douglas Saathoff January 1, 2000 - December 31, 2000 $104,738 (5)
(1) agreement is between Sandra Poole-Christal and the Company's subsidiary
GlobalSCAPE, Inc.
(2) agreement provides for an automatic renewal for an additional one-year term
unless notice of termination is given 120 days prior to end of initial term.
(3) agreement provides for 6 months of continuing payments in the event of
executive's death or disability; if executive is terminated without cause,
executive is entitled to continuing payments until the third anniversary of the
start date or for 12 months from termination, whichever is longer; if executive
resigns following a change in control of GlobalSCAPE, executive is entitled to
continuing payments until the third anniversary of the start date, or if
agreement has been renewed, until 1 year following anniversary date.
(4) agreement provides for 6 months of continuing payments in the event of
executive's death or disability; if executive is terminated without cause or
resigns following a change in control in company, executive is entitled to
continuing payments until third anniversary of start date or end of 24 months
from termination, whichever comes first.
(5) agreement provides for 6 months of continuing payments in the event of
executive's death or disability; if executive is terminated without cause,
executive is entitled to continuing payments until the third anniversary of the
start date or for 12 months from termination, whichever is longer; if executive
resigns following a change in control of Company, executive is entitled to
continuing payments until the third anniversary of the start date, or if
agreement has been renewed, until 1 year following anniversary date.
The Board may increase each officer's salary, and may pay a bonus to each
of them from time to time. Each of the employment agreements provides for early
termination under certain conditions, and restricts each executive from various
competing and other potentially damaging activities during employment and for a
specified time after termination of employment.
Stock Option Plans
1997 Option Plan
The American TeleSource International Inc. 1997 Stock Option Plan (the
"1997 Option Plan") was adopted in February 1997 by the Board of Directors of
the Company and approved in May 1997 by the Company's shareholders.
The 1997 Option Plan terminated on February 10, 1998. No further options
will be granted under the 1997 Option Plan. All options outstanding under the
1997 Option Plan on the date of termination will remain outstanding under the
1997 Option Plan in accordance with their respective terms and conditions.
As of July 31, 2000, options for 312,003 shares were outstanding under the
1997 Option Plan at a weighted average exercise price of $1.59 and options for
171,667 shares were exercisable. As of July 31, 2000, 4,450,331 options had been
exercised.
1998 Option Plan
The American TeleSource International, Inc. 1998 Stock Option Plan (the
"1998 Option Plan") was adopted in September 1998 by the Board of Directors of
the Company and approved December 1998 by the Company's shareholders.
6
<PAGE>
The 1998 Option Plan authorizes the grant of up to two million incentive
stock options and non-qualified stock options to employees, directors and
certain other persons. As of July 31, 2000, the Board had granted options to
purchase 2,097,300 shares of Common Stock under the 1998 Option Plan at exercise
prices as follows: (i) 1,541,000 at $0.55 per share, (ii) 302,300 at $0.78 per
share, (iii) 254,000 at $0.81 - $4.63. As of July 31, 2000, options for
1,379,211 shares were outstanding under the 1998 Option Plan at a weighted
average exercise price of $0.70. As of July 31, 2000, 85,499 options were
exercisable at a weighted average exercise price of $0.60, 525,255 options had
been exercised and 192,834 options had been forfeited.
Stock Option Grants in Fiscal 2000
No options were granted to the Named Executive Officers during the
Company's fiscal year ended July 31, 2000.
Aggregate Option Exercises in Fiscal 2000 and Fiscal Year-End Option Values
The following table shows stock options exercised by the Named Executive
Officers during the fiscal year ended July 31, 2000, including the aggregate
value of gains on the date of exercise. In addition, the table includes the
number of shares covered by both exercisable and unexercisable stock options as
of July 31, 2000. Also reported are the values of "in-the-money" options which
represent the positive spread between the exercise price of any such existing
stock options and the Common Stock price as of July 31, 2000.
<TABLE>
<CAPTION>
Shares
Acquired
On Value Number of Securities Value of Unexercised
Exercise Realized Underlying Unexercised In-the-Money Options at
-------- --------
Name (#) ($)(1) Options at FYE(#) FYE($)(2)
---- --- ------ ----------------- ---------
Exercisable Unexercisable Exercisable Unexercisable
----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Arthur L. Smith 866,666 $2,393,998 - 133,334 - $526,669
Charles R. Poole 383,333 677,833 - 83,334 - 301,336
H. Douglas Saathoff 933,333 2,576,999 - 66,667 - 263,335
Sandra Poole-Christal 40,000 111,150 - 50,000 - 197,500
</TABLE>
(1) The values of the exercised options represent the difference between the
closing price of the shares underlying the options on the AMEX and the
exercise price of the options on the date of exercise. Value realized does
not take into account (a) any restrictions on trading as a result of
insider trading rules and policies, (b) market conditions and/or (c) the
restrictions in "Certain Relationships and Related Transactions" relating
to the Board of Directors plans to lend approximately $1.5 million to
certain key executive officers allowing them to exercise their vested
options.
(2) The values of the unexercised options are based upon the $4.50 closing
price per share on July 31, 2000, as reported on the American Stock
Exchange, and represent the difference between the fair market value of the
shares underlying the options and the exercise price of the options at
fiscal year end.
Compensation Committee Interlocks and Insider Participation
Messrs. Benkendorf, Kauachi and Nye serve on the Compensation Committee.
The Compensation Committee met four times in fiscal 2000.
7
<PAGE>
In January 1997, the Company entered into an agreement with KAWA
Consultores, S.A. de C.V., an international consulting firm of which Company
director Carlos K. Kauachi is president, for international business development
support. Under the terms of the agreement, the Company paid the consulting firm
$8,000 per month for a period of twelve months. In January 1998, the agreement
was renewed at $10,000 per month (payable in a combination of cash and Common
Stock) for a period of twelve months. In March 1999, the agreement was renewed
at $6,000 per month for a period of twelve months. Subsequent to February 2000,
the agreement was continued month-to-month until July 2000 when it was
terminated.
The Company has entered into a month-to-month agreement with Technology
Impact Partners, a consulting firm of which Company director Richard C.
Benkendorf, is principal and owner. Under the agreement, Technology Impact
Partners provides the Company with various services that include strategic
planning, business development and financial advisory services. Under the terms
of the agreement, the Company pays the consulting firm $3,750 per month plus
expenses. At July 31, 2000, the Company has a payable to Technology Impact
Partners of approximately $112,000.
Director Compensation
Directors are reimbursed their reasonable out-of-pocket expenses in
connection with their travel to and attendance at meetings of the Board of
Directors. Each director other than Arthur L. Smith receives $1,000 for each
meeting of the Board attended excluding telephonic meetings for which each
director other than Arthur L. Smith receives $250.
On September 9, 1998, each of the directors of the Company were granted
options to purchase 75,000 shares of Common Stock of the Company, with the
exception of Murray R. Nye, who was granted options to purchase 150,000 shares
of Common Stock of the Company. In addition, each of the directors serving on a
committee of the Board were granted options to purchase an additional 15,000
shares of Common Stock for each committee served on, at an exercise price of
$0.55 per share under the 1998 Option Plan.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires
the Company's directors and executive officers and persons who own more than 10%
of a registered class of the Company's equity securities to file various reports
with the Securities and Exchange Commission concerning their holdings of, and
transactions in, securities of the Company. Copies of these filings must be
furnished to the Company.
Based on a review of the copies of such forms furnished to the Company and
other information, the Company believes that, during the fiscal year ended July
31, 2000, all of its directors and executive officers were in compliance with
the applicable filing requirements.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding ownership of
the Common Stock as of November 15, 2000 by (i) each person known by the Company
to be the beneficial owner of more than 5% of the outstanding shares of Common
Stock, (ii) each director of the Company, (iii) the Chief Executive Officer and
each other executive officer of the Company named in the Summary Compensation
Table, and (iv) all executive officers and directors of the Company as a group.
8
<PAGE>
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership of
Name Common Stock(1) Percent of Class
---- --------------- ----------------
<S> <C> <C>
Arthur L. Smith (2)..................................................... 3,490,282 5.13%
H. Douglas Saathoff. (3)................................................ 1,070,416 1.57%
Sandra Poole-Christal (4)............................................... 65,000 *
Murray R. Nye (5)....................................................... 525,500 *
Tomas Revesz (6)........................................................ 177,000 *
Richard C. Benkendorf (7)............................................... 215,000 *
Carlos K. Kauachi (8)................................................... 165,423 *
All directors and executive officers as a group (12 persons) (9)........ 6,032,952 8.81%
</TABLE>
* Less than 1%
(1) To the knowledge of the Company, each person named in the table has sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by him. Shares of Common Stock that are not
outstanding but that may be acquired by a person upon exercise of options
within 60 days of November 15, 2000 are deemed outstanding for the purpose
of computing the percentage of outstanding shares beneficially owned by
such person but are not deemed outstanding for the purpose of computing the
percentage of outstanding shares beneficially owned by any other person.
(2) Includes 66,667 shares issuable upon exercise of presently exercisable
options or options exercisable within 60 days of November 15, 2000
(3) Includes 33,333 shares issuable upon exercise of presently exercisable
options or options exercisable within 60 days of November 15, 2000.
(4) Includes 25,000 shares issuable upon exercise of presently exercisable
options or options exercisable within 60 days of November 15, 2000.
(5) Includes 40,000 shares issuable upon exercise of presently exercisable
options or options exercisable within 60 days of November 15, 2000.
(6) Includes 30,000 shares issuable upon exercise of presently exercisable
options or options exercisable within 60 days of November 15, 2000.
(7) Includes 35,000 shares issuable upon exercise of presently exercisable
options or options exercisable within 60 days of November 15, 2000.
(8) Includes 30,000 shares issuable upon exercise of presently exercisable
options or options exercisable within 60 days of November 15, 2000.
(9) Includes 465,832 shares issuable upon exercise of presently exercisable
options or options exercisable within 60 days of November 15, 2000.
The following table sets forth certain information regarding ownership of
the Company's approximately 70% owned subsidiary GlobalSCAPE, Inc.'s Common
Stock as of November 15, 2000 by (i) each person known by the Company to be the
beneficial owner of more than 5% of the outstanding shares of Common Stock, (ii)
each director of the Company or the Company's subsidiary, (iii) the Chief
Executive Officer and each other executive officer of the Company named in the
Summary Compensation Table, and (iv) all executive officers and directors of the
Company as a group.
<TABLE>
<CAPTION>
Amount and Nature of
Beneficial Ownership of
Name Common Stock(1) Percent of Class
---- --------------- ----------------
<S> <C> <C>
Arthur L. Smith ................................................ 171,181 1.32%
H. Douglas Saathoff ............................................ 51,854 *
</TABLE>
9
<PAGE>
<TABLE>
<S> <C> <C>
Sandra Poole-Christal ..................................................... 2,000 *
Murray R. Nye ............................................................. 24,250 *
Tomas Revesz .............................................................. 7,350 *
Richard C. Benkendorf ..................................................... 9,000 *
Carlos K. Kauachi ......................................................... 8,271 *
All directors and executive officers as a group (12 persons) (4)........... 278,356 2.15%
</TABLE>
(1) To the knowledge of the Company, each person named in the table has sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by him. Shares of Common Stock that are not
outstanding but that may be acquired by a person upon exercise of options
or war rants within 60 days of November 15, 2000 are deemed outstanding for
the purpose of computing the percentage of outstanding shares beneficially
owned by such person but are not deemed outstanding for the purpose of
computing the percentage of outstanding shares beneficially owned by any
other person.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In April 1998, the Company engaged two companies for billing and
administrative services related to network management services it provides. The
companies, which are owned by Tomas Revesz, a director of the Company, were paid
approximately $140,000 for their services during fiscal 1998. Subsequent to July
31, 1999, the Company entered into an agreement with the two companies capping
their combined monthly fees at $18,500 per month. For fiscal 1999 and 2000, the
companies were paid approximately $180,000 and $160,000, respectively, for their
services. Additionally, the Company has a payable to Mr. Revesz of $90,000.
In February 1999, we entered into notes payable with related parties, all
of whom were officers or directors of ATSI in the amount of $250,000. The notes
accrued interest at a rate of 12% per year until paid in full. As of July 31,
2000, the notes were paid in full.
In February 2000, our Board of Directors approved a plan to lend
approximately $1.5 million, at a market interest rate, in the aggregate to
certain key executive officers to allow them to exercise approximately 2,250,000
of their vested options. The executive officers who borrowed under the plan must
adhere to the following conditions: 1) they must contribute 10% in cash of the
amount borrowed; 2) the stock obtained with the exercises must be escrowed under
a twelve month standstill agreement or until such time as the note is paid; and
3) any derivative equity obtained from the stock's ownership must be escrowed
for a six-month period. As of April 30, 2000, we had lent approximately $1.2
million to key executive officers allowing them to exercise vested options. We
recognized the transaction by recording a note receivable for each executive
officer. As of July 31, 2000, the note receivable balance was approximately $1.1
million.
On August 1, 2000 we entered into a consulting agreement with Charles R.
Poole, former President and Chief Operating Officer of ATSI-Delaware, to perform
certain consulting services for the period beginning August 1, 2000 and ending
December 31, 2000 in the amount of approximately $10,583 per month.
See "Compensation Committee Interlocks and Insider Participation" for
certain additional relationships and related party transactions.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(c) Exhibits
23 Consent of Arthur Andersen LLP) (Exhibit to this Amended Annual Report on
Form 10-K for year ended July 31, 2000 filed November 28, 2000)
10
<PAGE>
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 authorized, in San Antonio, Texas on
November 28, 2000.
AMERICAN TELESOURCE INTERNATIONAL, INC.
By: /s/ Arthur L. Smith
-------------------
Arthur L. Smith
Chief Executive Officer
By: /s/ H. Douglas Saathoff
-----------------------
H. Douglas Saathoff
Senior Executive Vice President and Chief
Financial Officer
Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of
1934, this report has been signed below by the following persons in the
capacities indicated on November 28, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ ARTHUR L. SMITH Chairman of the Board,
-------------------
Chief Executive Officer, Director
(Principal Executive Officer)
/s/ H. DOUGLAS SAATHOFF Chief Financial Officer and Senior Executive
-----------------------
Vice President (Principal Accounting and Finance Officer)
/s/ RICHARD C. BENKENDORF Director
-------------------------
/s/ CARLOS K. KAUACHI Director
---------------------
/s/ MURRAY R. NYE Director
-----------------
/s/ TOMAS REVESZ Director
----------------
</TABLE>
11
