ATSI Communications may seek out PIPE

By Sheri Kasprzak

New York, March 23 - ATSI Communications Inc. said it might be heading to the private placement market this year for extra funds.

According to the latest form 10-QSB filed with the Securities and Exchange Commission, ATSI may have to seek alternative forms of financing if it cannot secure working capital from traditional debt offerings.

"We will continue to pursue cost-cutting or expense-deferral strategies in order to conserve working capital," said the report. "These strategies will limit the implementation of our business plan and increase our future liabilities. We are dependent on our operations and the proceeds from future debt or equity investments to fund our operations and fully implement our business plan.

"If we are unable to raise sufficient capital, we will be required to delay or forgo some portion of our business plan, which will have a material adverse effect on our anticipated results from operations and our financial condition.

"Alternatively, we may seek interim financing in the form of private placement of debt or equity securities. Such interim financing may not be available in the amounts or at the time when it is required, and will likely not be on terms favorable to the company."

In the report, the company said its current cash balances and financial resources may not be enough to support its ongoing operations.

Looking to its latest earnings report, ATSI sustained a net loss of $170,000 for the quarter ended Jan. 31, compared with net income of $906,000 for the same period ended Jan. 31, 2005.

San Antonio, Texas-based ATSI is a voice-over-internet protocol provider.

On Thursday, ATSI's stock closed down 5 cents, or 11.11%, at $0.40 (OTCBB: ATSX).

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