UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, DC. 20549

                                FORM 10-KSB/A
                              (Amendment No. 1)

 (Mark One)

   [ X ]       ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

                  FOR THE FISCAL YEAR ENDED OCTOBER 31, 2005

   [   ]       TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
                      SECURITIES EXCHANGE ACT OF 1934

        FOR THE TRANSITION PERIOD FROM ______________ TO ______________.

                        COMMISSION FILE NUMBER 0-22636

                           RAPID LINK, INCORPORATED
                (Name of small business issuer in its charter)

            DELAWARE                                75-2461665
 -------------------------------        ------------------------------------
 (State or other jurisdiction of        (I.R.S. Employer Identification No.)
 incorporation or organization)

           17383 SUNSET BOULEVARD, SUITE 350 LOS ANGELES, CA 90272
           -------------------------------------------------------
           (Address of principal executive offices)     (Zip Code)

                   Issuer's telephone number (310) 566-1700

        SECURITIES REGISTERED UNDER SECTION 12(b) OF THE EXCHANGE ACT:

                                     NONE

        SECURITIES REGISTERED UNDER SECTION 12(g) OF THE EXCHANGE ACT:

                        COMMON STOCK, $0.001 PAR VALUE
                        ------------------------------
                               (title of class)

 Check whether the issuer is not required to file reports pursuant to Section
 13 or 15(d) of the Exchange Act.  [ ]

 Check whether  the issuer  (1) filed  all reports  required to  be filed  by
 Section 13 or 15(d) of the  Exchange Act during the  past 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 [ ]

 Check if there is no disclosure of delinquent filers in response to Item 405
 of Regulation  S-B  contained  in  this form,  and  no  disclosure  will  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-KSB or any amendment to this Form 10-KSB. [X]

 Indicate by check mark whether the registrant is a shell company (as defined
 in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

 State issuer's revenues for its most recent fiscal year. $9,827,049.

 The aggregate market value of the voting and non-voting common stock held by
 non-affiliates of the registrant  as of January  16, 2006 was  approximately
 $3,515,662, based on  the average bid  and ask price  of a  share of  common
 stock as quoted on the OTC Bulletin Board of $0.12.

 As of January 24, 2006, 29,297,183 shares of common stock of the issuer were
 outstanding.

                     DOCUMENTS INCORPORATED BY REFERENCE.
                                    None.

 Transitional Small Business Disclosure Format (Check One):  Yes [ ]  No [X]

<PAGE>

                               Explanatory Note

 This Amendment No. 1 on Form 10-KSB/A for the fiscal year ended  October 31,
 2005 ("Amendment No. 1") is filed  to correctly include all of the  exhibits
 listed  in our Exhibit Index set forth in the Annual Report Form 10-KSB  for
 our  fiscal  year ended  October 31, 2005,  which  was filed with the SEC on
 January 30, 2006.  Our filing agent  mistakenly  filed the exhibits from our
 previous year's Annual Report on Form 10-K for the fiscal year ended October
 31, 2004.

 The remainder of the Form 10-KSB filed on January 30, 2006 is unchanged.


                                   SIGNATURES


 Pursuant to the  requirements 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 on January 31, 2006.

                               Rapid Link, Incorporated


                               By: /s/ JOHN JENKINS
                               -----------------------------------------
                               John Jenkins
                               Chief Executive Officer and
                               Chairman of the Board



                               By: /s/ ALLEN SCIARILLO
                               -----------------------------------------
                               Allen Sciarillo
                               Executive Vice President and
                               Chief Financial Officer

<PAGE>


                          FORWARD-LOOKING STATEMENTS

 This Annual Report on Form 10-KSB (this "Report") includes  "forward-looking
 statements" within the meaning of Section 27A of the Securities Act of 1933,
 as amended  (the  "Securities  Act"), and  Section  21E  of  the  Securities
 Exchange Act  of 1934,  as amended  (the "Exchange  Act").   Forward-looking
 statements are statements other than historical information or statements of
 current condition. Some forward-looking statements may be identified by  the
 use  of  such  terms  as  "expects",  "will",  "anticipates",   "estimates",
 "believes", "plans" and  words of  similar meaning.   These  forward-looking
 statements relate to  business plans,  programs, trends,  results of  future
 operations, satisfaction  of future  cash  requirements, funding  of  future
 growth, acquisition  plans and  other matters.  In light  of the  risks  and
 uncertainties inherent  in  all such  projected  matters, the  inclusion  of
 forward-looking statements in this Form 10-KSB  should not be regarded as  a
 representation by us or any other  person that our objectives or plans  will
 be achieved or that our operating  expectations will be realized.   Revenues
 and results  of  operations  are difficult  to  forecast  and  could  differ
 materially from  those  projected in  forward-looking  statements  contained
 herein, including without limitation statements regarding our belief of  the
 sufficiency  of  capital  resources  and  our  ability  to  compete  in  the
 telecommunications  industry.   Actual   results  could  differ  from  those
 projected in any forward-looking statements for, among others, the following
 reasons: (a) increased competition from  existing and new competitors  using
 voice over Internet protocol ("VoIP") to provide telecommunications services
 over the Internet,  (b) the relatively  low barriers to  entry for  start-up
 companies  using  VoIP  to  provide  telecommunications  services  over  the
 Internet, (c)  the  price-sensitive  nature  of  consumer  demand,  (d)  the
 relative lack of  customer loyalty to  any particular  provider of  services
 over the  Internet,  (e) our  dependence  upon favorable  pricing  from  our
 suppliers to  compete  in  the telecommunications  industry,  (f)  increased
 consolidation in the telecommunications industry, which may result in larger
 competitors being able to compete more  effectively, (g) failure to  attract
 or retain key employees, (h) continuing changes in governmental  regulations
 affecting the telecommunications industry and the Internet and (i)  changing
 consumer demand,  technological  developments and  industry  standards  that
 characterize the  industry.   We do  not undertake  to update  any  forward-
 looking statements contained herein. For a  discussion of these factors  and
 others, please see "Risk  Factors" in Item  1 of this  Report.  Readers  are
 cautioned not to place undue reliance on the forward-looking statements made
 in this Report or in any document or statement referring to this Report.


                                    PART I

 Item 1.  Description of Business.

 Our Company

 Throughout this Annual Report, the term "we", "Rapid Link", "Dial Thru"  and
 the "Company"  refer  to Rapid Link, Incorporated,  a  Delaware  corporation
 (formerly  known  as Dial Thru International Corporation) and ARDIS  Telecom
 &  Technologies,  Inc.,   successor  by  merger  to  Canmax  Inc.,  and  its
 subsidiaries.   The Company  was incorporated  on July  10, 1986  under  the
 Company Act of the Province of British Columbia, Canada. On August 7,  1992,
 we renounced our original province of incorporation and elected to  continue
 our domicile under the  laws of the  State of Wyoming,  and on November  30,
 1994   our  name  was  changed  to  "Canmax  Inc."   On  February  1,  1999,
 we  reincorporated  under  the  laws of the State of Delaware under the name
 "ARDIS Telecom  &  Technologies,  Inc."  On  November 2, 1999,  we  acquired
 substantially all  of the  business and assets  of  Dial Thru  International
 Corporation, a  California  corporation  (the "DTI  Acquisition"),  and,  on
 January 19, 2000,  we changed our  name from ARDIS  Telecom &  Technologies,
 Inc. to  Dial Thru  International  Corporation.   On  November 1,  2005,  we
 changed our name to "Rapid Link, Incorporated."  Our common stock  currently
 trades on the OTC Bulletin Board under the symbol "RPID".

 From our inception  until 1998 we  provided retail  automation software  and
 related services to the retail  petroleum and convenience store  industries.
 In 1998  we decided  that the  rapidly expanding  telecommunications  market
 presented an  opportunity to  utilize some  of  the technology  and  support
 capabilities  that   we   had   developed,   and   we   entered   into   the
 telecommunications industry  via  the pre-paid  long  distance  market.   In
 December 1998,  we sold  our retail  automation  software business  and  now
 operate only in the telecommunications marketplace.

 Our principal executive offices are located at 17383 Sunset Boulevard, Suite
 350, Los Angeles, California 90272, our  telephone number is (310)  566-1700
 and our website address is www.rapidlink.com.

 Recent Developments

 On June  1, 2005,  our Company  and GCA  Strategic Investment  Fund  ("GCA")
 agreed to extend  the maturity  dates of  the Company's  two 6%  convertible
 debentures, each convertible  debenture providing financing  of $550,000  in
 January 2002 (GCA-Debenture)  and July 2003  (GCA-Note),  respectively.  The
 maturity date for the GCA-Debenture was  extended  to November 26, 2005, and
 the  maturity  date for the GCA-Note was extended to November 26, 2006.  The
 remaining balance  of  the  GCA-Debenture and  GCA-Note  were  $455,000  and
 $552,457, respectively, at  October 31,  2005.   Both debentures  originally
 matured in November  2004.  We  are in negotiations  to extend the  maturity
 date of the GCA Debenture that was due  on November 26, 2005.  In  addition,
 we are currently seeking a debt facility or equity financing that will allow
 us to either convert  our outstanding debt obligations  with GCA and  Global
 into the new financing, and/or pay down a portion or all of the amounts  now
 due.  There  can be no  assurance that sufficient  debt or equity  financing
 will be available  or available on  terms acceptable to  us.  The  debenture
 continues to accrue interest at the stated rate.  Furthermore, the debenture
 includes certain default provisions that can be enforced by GCA as a  result
 of nonpayment.  The  debenture is classified as  a current liability on  our
 balance sheet as of October 31, 2005.

 On June 1, 2005, our Company and Global Capital Funding Group, LP ("Global")
 agreed to extend the  maturity date of the  Company's 12% note payable  (the
 "GC-Note"), which provided  financing of  $1,250,000 in  November 2002.  The
 maturity date was  extended to February  29, 2008.   In connection with  the
 extension, the  GC-Note was  converted to  a 10.08%  Convertible Note  ("GC-
 Conote").  In connection with the extension of the maturity date of the  GC-
 Note, the interest due  on the GC-Note of  approximately $350,000 as of  May
 31, 2005 was converted to a  $400,000 non-interest bearing convertible  Note
 Payable (the "GC-Conote2")  to Global.   The  GC-Conote2 requires  quarterly
 payments of $50,000 on the last  day of March, June, September and  December
 of each year until the March 31, 2007 maturity date, commencing on June  30,
 2005.  We did not make the payment due  on September 30, 2005.  The  GC-Note
 includes certain default  provisions that  can be  enforced by  Global as  a
 result of nonpayment.   We are in  negotiations with Global  to allow us  to
 extend the due date of this payment.   This amount is included as a  current
 liability on  our balance  sheet as  of  October 31,  2005.   The  remaining
 balance of  the  GC-Note and  the  GC-Conote was  $1,250,000  and  $275,000,
 respectively,  at  October  31, 2005.   The GC-Note  originally  matured  in
 November 2004.

 On July 21,  2005, our  Company and  the holders  of our  related party  10%
 convertible  debentures  (the  "Notes")  with  an  outstanding  balance   of
 $1,003,390 at October 31,  2005, agreed to extend  the maturity date of  the
 Notes to February  29, 2008.   The original  maturity date  was October  24,
 2003.

 On October 25, 2005,  at our annual  shareholders meeting, our  shareholders
 approved  a  change  in the Company's name to Rapid Link, Incorporated.  The
 name change became effective on November 1, 2005.

 Acquisition

 On October 25, 2005, Dial Thru  entered into an Asset Purchase Agreement  to
 acquire certain assets, including but not  limited to the customer base  and
 certain specified  contracts  and  items  of  equipment  (collectively,  the
 "Assets"), of Integrated  Telecommunications, Inc., a  New York  corporation
 that is an international  long distance carrier  providing VoIP services  to
 retail customers in the United States,  and wholesale services to  customers
 worldwide.  The closing date for the acquisition was October 31, 2005.

 Development of Our Telecommunications Business

 In November 1999, we completed the DTI Acquisition and continued  operations
 of its  facilities-based  telecommunications carrier  business  through  its
 subsidiary,  Dial  Thru.com.  In  the  third  quarter  of  fiscal  2000,  we
 relocated our Texas  operations, including  our switching  facilities, to  a
 location in downtown Los Angeles, California.  During the fourth quarter  of
 fiscal 2001, we  announced the creation  of our "Bookend  Strategy" and  the
 roll out of our facilities-based Internet Protocol network, whereby we  sell
 VoIP to allow us to compete in the international telecommunications market.

 During the fourth quarter of fiscal 2001, we acquired the assets and certain
 of the  liabilities  of Rapid  Link,  Incorporated ("RLI"),  a  provider  of
 integrated data  and voice  communications services  to both  wholesale  and
 retail customers  around  the  world.   RLI's global  VoIP  network  reaches
 thousands   of  retail  customers,  primarily  in  Europe  and  Asia.   This
 acquisition has significantly enhanced  our product lines, particularly  our
 Dial  Thru  and  Re-origination  services,  Global  Roaming  products,   and
 wholesale termination.  Furthermore, the acquisition has allowed us to  roll
 out services to additional international markets and more rapidly expand our
 VoIP wholesale strategy  due to  the engineering  and operational  expertise
 acquired in the transaction.

 During the latter part of fiscal  2004, we began offering VoIP products  and
 services to  our  existing  retail customers,  and  shifted  our  sales  and
 marketing focus for new customers to these VoIP offerings.

 Our Business Strategy

 Bookend Strategy

 Historically, the focus of our  business was the development  implementation
 of our "Bookend  Strategy", which is  to provide telecommunication  services
 originating in foreign  countries  and  in the  corresponding ethnic segment
 domestically in  the United  States via  the Internet  to transport  various
 forms of  communications.   These services  are provided  primarily via  the
 public Internet,  utilizing VoIP  and  other digitized  voice  technologies.
 VoIP is voice communication that has been converted into digital packets and
 is then addressed, prioritized, and transmitted  over any form of  broadband
 network utilizing the technology  that makes the  Internet possible.   These
 technologies allow us to transmit voice  communications with the same  high-
 density compression as  networks initially designed  for data  transmission,
 and at the same time utilize  a common network for providing customers  with
 data and other Web-based services.

 By utilizing VoIP over the public  Internet, we avoid the high network  cost
 associated with private line connections to each international  destination,
 which would require us to lease a dedicated line for a set period of time at
 a set rental rate and to "fill" idle network capacity with traffic in  order
 to offset the high fixed costs of such a private line.  The primary focus of
 our business  has been  the  sale of  a  bundled solution  of  communication
 services, such as international dial thru,  re-origination and fax over  the
 Internet to small and  medium enterprises ("SMEs")  worldwide.  We also sell
 telecommunications services for  foreign termination  of international  long
 distance traffic  into  the wholesale  market.   Our  primary  objective  in
 selling into  the wholesale  market is  to take  advantage of  below  market
 international rates that  arise from time  to time while  we are  developing
 revenue from our retail marketing operations.   We expanded the offering  of
 our wholesale services beginning in the 2002 fiscal year, and we continue to
 seek new market opportunities for select  wholesale routes that we can  make
 available to our customer.  In some markets, where the price advantages  and
 capacity limitations do not provide for significant retail opportunities, we
 sell only wholesale terminations.

 A key part of the Bookend Strategy is the establishment of direct routes for
 telecommunications traffic  to and  from a  target country.   Once  we  have
 determined that a particular country meets our requirements for availability
 of  retail  revenue  opportunities,  we then  must determine the best manner
 to  establish  dedicated  connectivity.  This  is  usually  accomplished  by
 establishing a  licensing  agreement  within the  country,  whereby  we  are
 licensed to sell these communication products.   We then make these products
 available to SMEs in the target country through public Internet  connections
 and apply the appropriate technology to  provide for the compression of  the
 telecommunications  traffic  over  these   routing  options.  The   emerging
 technology that is best  suited for the majority  of these installations  is
 VoIP.

 We have primarily focused on markets  where competition is not keen.   These
 markets  include  regions  where  the  deregulation  of   telecommunications
 services has not been completed and smaller markets that have not  attracted
 large multi-national  providers.   South Africa,  Asia, and  parts of  South
 America offer the greatest abundance of these target markets.

 We currently operate our domestic telecommunications switching facilities in
 Los Angeles, California and New York, New York, providing for long  distance
 services worldwide.   Development of  the private  Internet Protocol  ("IP")
 network and  the use  of VoIP  technology have  improved both  the cost  and
 quality  of  telecommunications  services,  as  well  as  facilitating   our
 expansion into other Internet related opportunities.

 Development of our VoIP Strategy

 The growth of the Internet has accelerated the rapid merger of the worlds of
 voice-based  and  data-based  communications.  By  first  digitizing   voice
 signals, then  utilizing  the same  packetizing  technology that  makes  the
 Internet possible, VoIP  provides for a  cost effective manner  in which  to
 perform the signal compression needed to maximize the return from the use of
 the public Internet.  In this way, not only has efficiency of the  dedicated
 circuits been improved, but use of the public Internet provides a much  more
 cost effective  means  of  transmission and  rapid  deployment  compared  to
 traditional private leased lines and circuits.

 During the latter  part of fiscal  2004 we began  offering value-added  VoIP
 communications services to customers, both domestically and internationally.
 To  date,  we have not derived significant new revenues from these services.
 We strive to provide our customers with a reliable, scalable and  affordable
 worldwide IP  communication service  with a  quality  focus.  We  focus  our
 efforts on providing first class customer  service, and hire employees  with
 experience in developing  and building technologically  advanced IP  enabled
 platforms and services.  Our intention is to provide our customers with  the
 best possible voice communication services, to both residential and business
 users, at affordable prices  that allow them  to communicate seamlessly  and
 effortlessly to anywhere and from anywhere in the world.

 Niche focus

 As a result of the RLI acquisition, we have an established brand name within
 the US military market, offering affordable international calling to members
 of the US military since the  acquisition of RLI in  2001.  RLI was  serving
 this niche market for  several years prior to  our acquisition.  Our  recent
 name change  to  Rapid Link, Incorporated  was  motivated  in part  to  more
 closely identify our Company  with the products  and services our  customers
 have become familiar with over the years.   Historically, we focused on  the
 soldier located  in foreign  markets.   However,  with  our new,  more  cost
 effective  VoIP  service  offerings,  we  are  able  to  market  to soldiers
 both domestically  and  internationally.  In addition,  we  are focusing our
 marketing efforts  to  college  students and  business  travelers,  with  an
 appealing, cost-effective method for these customers  to keep in touch  with
 family and friends while traveling or serving away from home.

 As an added benefit, we offer  our customers real-time billing to keep  them
 informed of charges they have accrued  on their account, and incentives  for
 them to add friends and family to our services.

 Our Rapid Link Solution

 Rapid Link  is  an  Internet-based communication  service  that  works  over
 virtually any  high-speed Internet  connection in  the world.   Our  service
 allows our customers  to call to  and/or from any  phone in the  world.   We
 utilize an Internet Access  Device ("IAD") (i.e. a  desktop adapter or  soft
 phone headset), to  connect customers to  our Rapid  Link network  software,
 which  enables  VoIP  communications.  Our  desktop adapter  allows for  the
 connection of a standard  telephone to the  adapter, providing for  familiar
 dialtone interface, while  the soft phone  headset plugs  directly into  the
 customer's computer. Our VoIP products  use Session Initiation Protocol,  or
 SIP, signaling, which  empowers edge  devices, such  as multimedia  terminal
 adapters, to  establish and  manage voice  calls on  all types  of  Internet
 systems.  Our  systems provide an  end user with  a local  phone number  for
 inbound calling and  comes with a  full set of  features and  functionality,
 including call waiting, caller ID, three-way conference calling, and "follow
 me"  features.   Additional  features   include  web-based  tools   allowing
 subscribers  to  manage  their  telephony  features  online,  manage   their
 accounts, and check their voice mail.  This allows the operator to provision
 accounts, provide customer support, and create a unified bill for high-speed
 data, telecommunications and other  services or organize  their bill in  any
 format to accommodate cost controls for their business accounting.  We  have
 designed our systems to  enable the termination of  our customers' calls  to
 the Public Switched Telephone Network ("PSTN"),  a service we purchase  from
 third party carriers, and to allow  for direct connection directly over  the
 Internet to other Rapid Link  customers anywhere in the  world.  As part  of
 the Rapid Link service, we currently resell IADs that we purchase from third
 parties.  These IADs are configured prior to shipping to work with our  VoIP
 software.

 We continue to  seek opportunities to  grow our  business through  strategic
 acquisitions that will complement our retail strategy as well as adding  key
 personnel that have demonstrated a proven  track record in sales,  marketing
 and operations of retail telecommunications organizations, especially in the
 area of retail VoIP.

 Our Products and Services

 Rapid Link VoIP Services

 We offer  several  VoIP  programs  to  the  business  office,  the  business
 professional  that  may  have  a  home  office,  the  US  military  and  the
 residential  consumer.  The residential  plans  offer  customers  a  cheaper
 alternative to traditional  local service, long  distance and  international
 calling.   Our  flat  rate  service plans  enable  the  customers  to  speak
 unlimited to their party without hidden charges.  Customers are charged at a
 per-minute rate for  international calls  to non-Rapid  Link customers,  and
 depending on the level  of plan selected,  may be charged  for calls to  the
 PSTN if usage exceeds the minutes under  their chosen plan.  We offer  three
 service plans to  members of the  US  military.  Two  of  the plans  include
 unlimited calling to the US  and Canada, while a  third plan provides for  a
 low per minute charge for calls to the  US and Canada.  Similarly, we  offer
 two residential  plans, one  providing for  unlimited calls  to the  US  and
 Canada, while the other includes the aforementioned per minute charge.   For
 business users, we offer  two slightly higher  priced plans, each  providing
 for unlimited  calls to  the US  and  Canada, with  the higher  priced  plan
 providing the customer with two phone lines. All of our Rapid Link customers
 receive access to a  variety of services, including  voice mail, caller  ID,
 call waiting,  3-way  calling,  area  code  selection,  and  online  account
 management and billing.  We  currently offer  enhanced 911 ("E911")  service
 for our VoIP  customers.  The E911 service  provides near real-time  address
 verification for both static users (those who place calls from one location)
 and nomadic users  (those who  move from  location to  location) and  routes
 calls to the Public Safety Access Point  in the customer's local area.   The
 call is  routed on  the highest  quality route  to ensure  call quality  for
 emergency communications.

 For our military customers, we have a  product called Mail Call, which is  a
 free voice mail service that delivers a wave file onto the customer's e-mail
 account, making it easy to receive messages.  Once a member of the  military
 or their family becomes a Rapid Link customer, we offer the customer a  toll
 free access number and security code.  When the customer dials the  supplied
 number and enters  the security code,  the subscriber can  leave a  message.
 Shortly thereafter, an e-mail will be  sent to the service member  recipient
 with a voice message attached to the e-mail.

 While we are optimistic that our VoIP-based retail products will provide  us
 with meaningful growth opportunities in our current fiscal year, we have yet
 to derive material  revenues from  any of  these products.   The  continuing
 viability of our  business and  operations is  dependant on  our ability  to
 exploit this retail opportunity and we  can give no assurances that we  will
 be successful.

 Dial Thru and Re-origination Services

 We provide a variety of international Dial Thru and Re-origination services.
 These services,  while  still  contributing a  significant  portion  of  our
 revenues, will continue to decrease as a percentage of our total revenues as
 we continue to develop  and market new services.   Generally, the Dial  Thru
 and  Re-origination  services  are  provided  to  customers  that  establish
 deposits or prepayments with us to  be used for long-distance calling.   The
 Dial Thru service allows  customers the convenience  of making local  and/or
 international calls in the same manner as traditional long distance dialing.
 In those markets in which we cannot currently provide Dial Thru service,  we
 offer our  Re-origination service,  which allows  a  caller outside  of  the
 United States to place a long  distance telephone call that appears to  have
 originated from our switch  in Los Angeles to  the customer's location,  and
 then connects the call  through our network  to anywhere in  the world.   By
 completing the calls in this manner, we are able to provide very competitive
 rates to the customer.  Wherever possible, we route  calls over our  private
 network.  By using VoIP to compress voice and data transmissions across  the
 public Internet,  we are  able to  offer these  services at  costs that  are
 substantially less than traditional communications services.

 International Wholesale Termination

 Primarily as  a  result  of  our  acquisition  of  RLI,  we  began  offering
 international  call  completion  on  a  wholesale  basis  to   international
 telecommunications companies.   Our service enables  our customers to  offer
 their own  customers phone-to-phone  global voice  and fax  services.   This
 service provides our customers with high quality and low cost long  distance
 without our customers having  to deploy their own  VoIP infrastructure.   We
 can also provide additional termination opportunities to customers that have
 developed their  own  VoIP  networks  with  nearly  instant  access  to  our
 termination points  by  connecting  to these  customers  via  the  Internet.
 Therefore, we  have  the  capability  to  offer  our  services  to  carriers
 connecting to our  network through  traditional dedicated  switch to  switch
 connections, and through the public  Internet whereby our customers  connect
 to our network using their own VoIP equipment.

 Global Roaming

 Our Global Roaming service provides customers a single account number to use
 to initiate phone-to-phone calls from  locations throughout the world  using
 specific toll-free  access  numbers.   This  service  enables  customers  to
 receive the  cost benefits  associated with  our telecommunications  network
 throughout the world.

 FaxThru

 We offer  FaxThru  and "store  and  forward"  fax services,  which  allow  a
 customer to  send a  fax to  another party  utilizing the  Internet  without
 incurring long distance or similar charges. From the customer's perspective,
 these  products  function  exactly  like traditional fax  services, but with
 significant savings in long distance charges.

 Suppliers

 Our   principal   suppliers   consist   of   domestic   and    international
 telecommunications carriers, and  Internet Service Providers.  Relationships
 currently exist  with a number of reliable carriers.  During the fiscal year
 ended October 31, 2005, one of our suppliers accounted for approximately 20%
 of  our total costs  of revenues  and  another supplier accounted for 11% of
 our total costs of revenues.  Due  to the  highly competitive nature  of the
 telecommunications business, we believe that the loss of  any carrier  would
 not have a long-term material impact on our business.

 Customers

 We focus our current retail sales and marketing efforts on our VoIP products
 and services, targeting SMEs, members of the US military, particularly those
 located in  foreign markets  where telecommunications  deregulation has  not
 taken place or is  currently underway, residential  customers in those  same
 markets and  to  a lesser  extent  the  United States,  and  VoIP  wholesale
 customers located both domestically and internationally.  We rely heavily on
 the use of commissioned agents to generate retail sales in foreign  markets,
 as well as web portals, magazines and local military base events, and  third
 party resellers.   By doing so, we believe that we establish a wide base  of
 customers with little vulnerability based on lack of customer loyalty.   Our
 wholesale customers are primarily large public telecommunications  customers
 in the United  States, and  medium to  large foreign  Postal, Telephone  and
 Telegraph companies,  which are  those  entities responsible  for  providing
 telecommunications services in  foreign markets and  are usually  government
 owned or controlled.

 During the fiscal year ended October 31, 2005 we provided wholesale services
 to a customer who accounted for 11% of our revenues and to another  customer
 who accounted for 13% of our revenues.  During the fiscal year ended October
 31, 2004, we provided wholesale services to a customer who accounted for 17%
 of our revenues, and to another customer who accounted for 13% of  revenues.
 We believe the loss of any  individual customer would not materially  impact
 our business.   We  generally do  business with  approximately 20  wholesale
 customers, any of which either collectively, or in most cases  individually,
 could compensate  for the  loss of  a major  customer.   Typically, we  have
 limited capacity,  imposed  by  our suppliers,  in  which  to  transmit  our
 telecommunications traffic.  We frequently offer this capacity to our larger
 customers, however it is possible to  offer these opportunities to all or  a
 few of our wholesale  customers at any time,  thus reducing our reliance  on
 any one  customer  and  providing  a  relatively  quick  transition  between
 customers if we should lose a customer.

 Competition

 The telecommunications  services  industry is  highly  competitive,  rapidly
 evolving and  subject  to  constant technological  change.  Other  providers
 currently offer  one  or  more  of  each of  the  services  offered  by  us.
 Telecommunications service companies  compete for consumers  based on  price
 and quality, with  the dominant providers  conducting extensive  advertising
 campaigns to  capture  market share.  As  a  service provider  in  the  long
 distance  telecommunications  industry,  we   compete  with  such   dominant
 providers as AT&T  Corp., MCI, Sprint  Corporation and Qwest  Communications
 International, all of which  are substantially larger than  us and have  the
 resources, history and customer bases to dominate virtually every segment of
 the telecommunications market.

 A substantial majority of the telecommunications traffic around the world is
 carried by  dominant carriers  in  each  market.  These  carriers,  such  as
 British Telecom and Deutsche Telekom,  have started to deploy  packet-switch
 networks for voice and  fax traffic.  In  addition, other industry  leaders,
 such as AT&T, MCI, Sprint and Qwest Communications International, as well as
 large cable companies, have begun to offer Internet telephony services  both
 in the United States and internationally.  These and other competitors  will
 be able to bundle services and products that are not offered by us, together
 with Internet telephony services, to gain a competitive advantage over us in
 the marketing and distribution of products and services

 We  also  compete   with  other  smaller   carriers  including  IDT   Corp.,
 deltathree.com, Primus Telecommunications Group,  Inc., Net2Phone Inc.,  8x8
 Inc., and private companies such as Vonage.  Additionally, a number of  non-
 traditional  competitors  have  been  attracted  to  the  market,  including
 internet-based service providers.  We also believe that existing competitors
 are likely  to continue  to  expand their  service  offerings to  appeal  to
 retailers and consumers especially in the area of VoIP.

 The market for international voice and fax call completion services is  also
 highly competitive.   We compete both  in the market  for enhanced  Internet
 communications services and  the market for  carrier transmission  services.
 We believe that  the primary competitive  factors in the  Internet and  VoIP
 communications business  are  quality  of service,  price,  convenience  and
 bandwidth.  We  believe   that  the  ability   to  offer  enhanced   service
 capabilities, including new services, will become an increasingly  important
 competitive factor in the near future.

 Future competition  could come  from  a variety  of  companies both  in  the
 Internet  and  telecommunications industries.  In  addition,  some  Internet
 service  providers  have   begun  enhancing   their  real-time   interactive
 communications and,  although  these  companies have  initially  focused  on
 instant messaging, we  expect them to  provide PC-to-phone  services in  the
 future.

 Wholesale Internet Telephone Service Providers

 During the  past  several  years, a  number  of  companies  have  introduced
 services that make Internet  telephony or voice  services over the  Internet
 available to  businesses and  consumers.   iBasis,  Teleglobe  International
 Holdings and the wholesale divisions  of Net2Phone and deltathree.com  route
 traffic to  destinations worldwide  and  compete  directly  with  us.  Other
 Internet telephony service providers focus on a retail customer base and may
 in the future compete  with us.   These companies offer  the kinds of  voice
 services we  are currently  offering. In  addition, companies  currently  in
 related markets  are providing  VoIP services  or  adapt their  products  to
 enable voice  over the  Internet services.   Many  of these  companies  have
 migrated into the Internet telephony market as direct competitors.

 Regulation of Internet Telephony and the Internet

 Telecommunications services are subject  to extensive government  regulation
 at  both  the  federal   and   state  levels  in  the  United  States.   Any
 violations  of the regulations may  subject  us  to  enforcement  penalties.
 The  Federal Communications  Commission  ("FCC") has  jurisdiction  over all
 telecommunications common carriers to the extent they provide interstate  or
 international communications services, including  the use of local  networks
 to originate or  terminate such services.  Each state regulatory  commission
 has jurisdiction over the same carriers  with respect to their provision  of
 local and  intrastate  long distance  communications  services.  Significant
 changes to  the applicable  laws  or regulations  imposed  by any  of  these
 regulators could have a material adverse  effect on our business,  operating
 results and financial condition.

 The following summary of regulatory developments and legislation is intended
 to describe what we  believe to be the  most important, currently  effective
 and  proposed  international,  federal,  state  and  local  regulations  and
 legislation that are likely to materially affect us. Some of these and other
 existing  federal  and  state  regulations  are  the  subject  of   judicial
 proceedings and legislative and administrative proposals that could  change,
 in varying degrees, the  manner in which this  industry operates. We  cannot
 predict the outcome of any of these proceedings or their impact on us or the
 telecommunications industry at this time. Some of these future  legislative,
 regulatory or judicial  changes may have  a material adverse  impact on  our
 business.

 Regulation by the Federal Communications Commission

 Universal  Service.  In  1997,  the  FCC  issued  an  order,  referred to as
 the  Universal  Service  Order,   to  implement  the   provisions   of   the
 Telecommunications Act of 1996 relating to the preservation and  advancement
 of universal telephone  service. The  Universal Service  Order requires  all
 telecommunications carriers providing interstate telecommunications services
 to  periodically   contribute   to  universal   service   support   programs
 administered by  the  FCC  (the "Universal  Service  Funds").  The  periodic
 contribution requirements to the Universal Service Funds under the Universal
 Service  Order  are  currently  assessed  based  on  a  percentage  of  each
 contributor's  interstate  and  international  end  user  telecommunications
 revenues reported to the FCC, which we measure and report in accordance with
 the legislative rules adopted by the FCC. The contribution rate factors  are
 determined quarterly  and  carriers,  including us,  are  billed  for  their
 contribution requirements  each  month  based on  projected  interstate  and
 international end-user telecommunications revenues, subject to periodic true
 up. We, and most  of our competitors, pass  through these Universal  Service
 Fund contributions  in the  price  of our  services,  either as  a  separate
 surcharge or as  part of the  base rate. In  addition to  the FCC  universal
 service support mechanisms, state regulatory agencies also operate  parallel
 universal service support systems. As a result, we are subject to state,  as
 well as federal, universal service support contribution requirements,  which
 vary from state to state. As with any regulatory obligation, if a federal or
 state regulatory body determines that we have incorrectly calculated  and/or
 remitted any universal service fund contribution, we could be subject to the
 assessment and collection of  past due remittances as  well as interest  and
 penalties  thereon.  Furthermore,  if  the  FCC  determines  that  we   have
 incorrectly calculated  and  overstated  a  separately  invoiced  line  item
 identified as a recovery of contributions to the Universal Service Funds  we
 could be  required to  repay  any such  over-collection  and be  subject  to
 penalty.

 The FCC is currently considering several proposals that would  fundamentally
 alter the  basis upon  which our  Universal Service  Fund contributions  are
 determined and the means by which  such contributions may be recovered  from
 our  customers,  changing  from  a  revenue  percentage  measurement  to   a
 connection (capacity) or telephone  number (access) measurement. Because  we
 pass through these contributions to consumers, a change in the  contribution
 methodology would not directly affect our net revenues; however, a change in
 how contributions are assessed might  affect our customers differently  than
 the customers of competing services, and therefore could either increase  or
 decrease the attractiveness of  our services. The timing  and effect of  any
 FCC action on this proposal is not yet known.

 Access Charges.  As a long distance provider, we remit access fees  directly
 to local exchange  carriers or indirectly  to our  underlying long  distance
 carriers  for  the  origination  and   termination  of  our  long   distance
 telecommunications traffic. Generally, intrastate access charges are  higher
 than interstate  access charges.  Therefore, to  the degree  access  charges
 increase or a greater percentage of our long distance traffic is intrastate,
 our costs of providing long distance services will increase.

 In April 2001, the FCC released a Notice of Proposed Rulemaking in which  it
 proposed  a  "fundamental  re-examination  of  all currently regulated forms
 of intercarrier  compensation."   Several  different  industry  groups  have
 submitted access charge reform proposals  to the  FCC.  The FCC has not  yet
 acted on  these  proposals  and it  is  not  yet known  when  it  will  act.
 Therefore, at this time we cannot predict the effect that the FCC's ultimate
 determinations regarding access charge reform may have upon our business.

 Taxes and Regulatory  Fees.   We are subject  to numerous  local, state  and
 federal taxes  and  regulatory fees,  including,  but not  limited  to,  the
 Federal excise tax, FCC universal service fund contributions and  regulatory
 fees, and  numerous  public  utility commission  regulatory  fees.  We  have
 procedures in place to ensure that  we properly collect taxes and fees  from
 our customers  and remit  such  taxes and  fees  to the  appropriate  entity
 pursuant to applicable law and/or  regulation. If our collection  procedures
 prove to be insufficient or if  a taxing or regulatory authority  determines
 that  our  remittances  were  inadequate,  we  could  be  required  to  make
 additional payments,  which could  have a  material  adverse effect  on  our
 business.

 International  Telecommunications   Services-Section  214.   In  the  United
 States, to the extent that we offer  services as a carrier, we are  required
 to obtain authority under Section 214 of  the Communications Act of 1934  to
 provide telecommunications service that originates within the United  States
 and terminates  outside the  United States.  We have  obtained the  required
 Section 214  authorization  from  the  FCC  to  provide  U.S.  international
 service. As a condition to our Section 214 authorization, we are subject  to
 various reporting and filing requirements. Failure to comply with the  FCC's
 rules could result in fines, penalties, forfeitures or revocation of our FCC
 authorization, each of  which could have  a material adverse  effect on  our
 business, financial condition, and results of operation.

 International Telecommunications  Services - International Settlements.  The
 FCC's International  Settlements Policy  ("Policy") restricts  the terms  on
 which U.S.-based carriers and certain of their foreign correspondents settle
 the cost of terminating each other's traffic over their respective networks.
 Under the International  Settlements Policy, absent  approval from the  FCC,
 international telecommunications  service agreements  with dominant  foreign
 carriers must be  non-discriminatory, provide for  settlement rates  usually
 equal to one-half of the accounting rate, and require proportionate share of
 return traffic. This Policy,  however, does not  apply to arrangements  with
 any non-dominant foreign carrier or, since March 30, 2005, with any dominant
 foreign carrier on routes where a demonstration has been made that at  least
 one U.S.  carrier has  a settlement  arrangement with  the dominant  foreign
 carrier that is  compliant with  the FCC's  applicable benchmark  settlement
 rates. This action has greatly lessened the number of instances in which the
 Policy applies,  effectively  granting  U.S. and  foreign  carriers  greater
 freedom to  set  rates and  terms  in their  agreements.  As a  result,  164
 countries currently are  exempt from the  International Settlements  Policy,
 representing  over  90%  of   all  U.S.-originated  international   traffic.
 Notwithstanding the  foregoing, the  FCC  could find  that  we do  not  meet
 certain  International  Settlements  Policy  requirements  with  respect  to
 certain of our foreign  carrier agreements. Although  the FCC generally  has
 not issued  penalties in  this area,  it  has issued  a Notice  of  Apparent
 Liability to a U.S. company for violations of the International  Settlements
 Policy and it  could, among other  things, issue a  cease and desist  order,
 impose fines or allow the collection of damages if it finds that we are  not
 in compliance with the International Settlements Policy. Any of these events
 could have a material adverse effect  on our business, financial  condition,
 or results of operation.

 State Regulations.  Our intrastate long  distance operations are subject  to
 various state  laws  and  regulations,  including,  in  most  jurisdictions,
 certification and  tariff filing  requirements. As  a certificated  carrier,
 consumers may file complaints against us at the public service  commissions.
 Certificates of authority can generally be conditioned, modified,  canceled,
 terminated, or revoked by state regulatory authorities for failure to comply
 with state  law and/or  the rules,  regulations and  policies of  the  state
 regulatory authorities. Fines and  other penalties also  may be imposed  for
 such violations. Public service commissions also regulate access charges and
 other  pricing  for  telecommunications  services  within  each  state.  The
 Regional Bell Operating  Companies and  other local  exchange carriers  have
 been seeking reduction of  state regulatory requirements, including  greater
 pricing flexibility, which, if granted, could subject us to increased  price
 competition.

 Regulation of Internet Telephony and other IP-Enabled Services

 The use of  the Internet  to provide telephone  service is  a fairly  recent
 market development. At present,  we are not aware  of any domestic, and  are
 aware of  only  a few  foreign,  laws  or regulations  that  prohibit  voice
 communications over the Internet.

 United States.   We  believe  that,  under U.S.  law,  the  Internet-related
 services that  we  provide constitute  information  services as  opposed  to
 regulated telecommunications  services  and,  as  such,  are  not  currently
 actively regulated by the FCC or any state agencies charged with  regulating
 telecommunications carriers. We cannot provide assurances that our Internet-
 related services  will not  be actively  regulated  in the  future.  Several
 efforts have been made in the  U.S. to enact federal legislation that  would
 either regulate  or  exempt  from  regulation  services  provided  over  the
 Internet.  Increased  regulation  of  the  Internet  may  slow  its  growth,
 particularly if other countries also impose regulations. Such regulation may
 negatively  impact  the  cost  of  doing  business  over  the  Internet  and
 materially adversely  affect  our  business,  operating  results,  financial
 condition and future prospects.

 The advent of VoIP services being provided by pure play VoIP providers, such
 as Vonage, cable television and other companies, and the increased number of
 traditional  telephone  companies  entering   the  retail  VoIP  space   has
 heightened the need for U.S. regulators to determine whether VoIP is subject
 to the  same regulatory  and financial  constraints as  wire line  telephone
 service. On  November 9, 2004,  the FCC  issued an  order in  response to  a
 petition from Vonage declaring that  Vonage-style VoIP services were  exempt
 from state telecommunications regulations. The FCC order applies to all VoIP
 offerings provided  over broadband  services. However,  this order  did  not
 clarify whether,  or  under what  terms,  VoIP  traffic may  be  subject  to
 intercarrier compensation requirements;  whether VoIP was  subject to  state
 tax or commercial  business regulations; or  whether VoIP  providers had  to
 comply with obligations related  to 911 emergency  calls, and the  Universal
 Service Fund ("USF")  of the Communications  Assistance for Law  Enforcement
 Act ("CALEA").  The FCC is addressing many of these issues through its  "IP-
 Enabled Services Proceeding", which opened in February 2004.

 Due to perceived urgency,  however, the FCC did  take some specific  actions
 outside of the  broad IP-Enabled  Services Proceeding  to address  emergency
 services and law  enforcement issues.  On June 3,  2005, the  FCC issued  an
 order establishing rules requiring interconnected VoIP service providers  to
 incorporate 911  emergency  call  capabilities  for  their  customers  as  a
 standard feature of  their services,  rather than  an optional  enhancement.
 And, on August 5, 2005, the FCC announced the extension of CALEA to  certain
 types of VoIP  providers.  Any  additional regulation  of IP-based  services
 concerns us and we must therefore remain diligent with respect to evaluating
 the impact of FCC proposals and decisions.  However, based on the nature  of
 the IP-enabled services we currently provide,  we do not believe either  FCC
 decision will materially adversely  affect our business, operating  results,
 financial condition or future prospects.

 The FCC has  also considered whether  to impose surcharges  or other  common
 carrier regulations upon  certain providers of  VoIP or Internet  telephony.
 While the FCC has presently refrained  from such regulation, the  regulatory
 classification of Internet telephony remains unresolved. If the FCC were  to
 determine  that   certain  Internet-related   services  including   Internet
 telephony services  are subject  to  FCC regulations  as  telecommunications
 services, the FCC could  subject providers of  such services to  traditional
 common carrier regulation, including requirements to make universal  service
 contributions, and  pay  access  charges to  local  telephone  companies.  A
 decision to impose such charges could also have a retroactive effect,  which
 could materially adversely affect us. It  is also possible that the FCC  may
 adopt  a  regulatory  framework   other  than  traditional  common   carrier
 regulation that  would  apply  to Internet  telephony  providers.  Any  such
 determinations could  materially adversely  affect our  business,  financial
 condition, operating results  and future prospects  to the  extent that  any
 such determinations negatively affect  the cost of  doing business over  the
 Internet or  otherwise  slow  the  growth  of  the  Internet.  Congressional
 dissatisfaction with FCC conclusions could  result in requirements that  the
 FCC impose  greater or  lesser regulation,  which in  turn could  materially
 adversely affect our  business, financial condition,  operating results  and
 future prospects.

 States.   State  regulatory  authorities may  also  retain  jurisdiction  to
 regulate certain aspects of the  provision of intrastate Internet  telephony
 services. Several state regulatory authorities have initiated proceedings to
 examine the regulation of such  services. Others could initiate  proceedings
 to do so.

 International.  The  regulatory treatment of  Internet telephony outside  of
 the U.S. varies widely from country  to country. A number of countries  that
 currently prohibit  competition in  the provision  of voice  telephony  also
 prohibit Internet telephony.  Other countries permit  but regulate  Internet
 telephony. Some countries will evaluate proposed Internet telephony  service
 on a case-by-case basis  and determine whether it  should be regulated as  a
 voice service or  as another  telecommunications service.  Finally, in  many
 countries, Internet telephony has not yet  been addressed by legislation  or
 regulation. Increased regulation of  the Internet and/or Internet  telephony
 providers or the prohibition of Internet telephony in one or more  countries
 could  materially  adversely  affect  our  business,  financial   condition,
 operating results and future prospects.

 Other General Regulations

 Although we do not  know of any other  specific new or proposed  regulations
 that  will  affect  our  business   directly,  the  regulatory  scheme   for
 competitive telecommunications market is still  evolving and there could  be
 unanticipated changes in the  competitive environment for communications  in
 general. For example, the FCC is currently considering rules that govern how
 Internet providers share telephone lines with local telephone companies  and
 compensate local telephone companies. These rules could affect the role that
 the Internet ultimately plays in the telecommunications market.

 Sales and Marketing

 We sell and  market our services  through vertical  web portals,  magazines,
 local military  base events,  and third  party resellers.  Our Company  also
 receives a good deal of referrals from existing customers. Our revenues  are
 primarily derived from  direct sales to  business and residential  accounts,
 sales  through   commissioned   agents   and  wholesale   sales   to   other
 telecommunications providers.  We  plan to expand our  sales effort to  both
 domestic and international business  accounts, as well  as add products  and
 services targeted toward residential customers in both markets.

 We offer individuals and businesses the  opportunity to become resellers  of
 our services through our affiliate and reseller programs. Resellers are able
 to purchase bulk accounts and hardware at reseller specific pricing and they
 are then able  to resell  these accounts  to private  individuals under  the
 Rapid Link brand.

 We have substantial revenues in foreign markets.  For the fiscal years ended
 October 31, 2005 and 2004, $3.4  million or 35% and  $2.9 million or 22%  of
 our total revenue  from continuing operations  for each year,  respectively,
 originated from foreign markets.

 Intellectual Property

 We do not hold  any patents or  trademarks.  Our  products and services  are
 available to other telecommunications companies.

 Employees

 As of January  15, 2006, we  have 31 full-time  employees,  seven  of  which
 perform administrative and financial functions, 12 of which perform customer
 support duties  and  12  of  which  have  experience  in  telecommunications
 operations  and/or  sales.   Ten  employees  are  located  in  Los  Angeles,
 California  and  22  employees  operate  in  other  offices  worldwide.   No
 employees are represented  by a labor  union, and we  consider our  employee
 relations to be good.

 Risk Factors

 Our cash flow may not be sufficient to satisfy our cost of operations

 For the fiscal years ended October 31, 2005 and 2004, we recorded net losses
 from continuing  operations  of  approximately $2.6  million  and  $800,000,
 respectively, on revenues from  continuing operations of approximately  $9.8
 million and $13.4 million,  respectively.  As a  result of these losses  and
 historical losses, we currently have a substantial working capital  deficit.
 In addition, approximately  71% of our  trade accounts  payable and  accrued
 liabilities are past due.  To be  able to service our debt obligations  over
 the course of the  2006 fiscal year we  must generate significant cash  flow
 and obtain additional financing.  If we are unable to do so or are otherwise
 unable to obtain funds necessary to make required payments on our trade debt
 and other indebtedness, it is  likely that we will  not be able to  continue
 our operations.

 Our operating history makes  it difficult to  accurately assess our  general
 prospects in the  VoIP portion of  the telecommunications  industry and  the
 effectiveness  of  our  business strategy.  In  addition,  we  have  limited
 meaningful historical financial data upon which to forecast our future sales
 and operating expenses.   Our  future performance  will also  be subject  to
 prevailing economic conditions and to financial, business and other factors.
 Accordingly, we cannot assure  you that we  will successfully implement  our
 business strategy or that our actual future cash flows from operations  will
 be sufficient to satisfy our debt obligations and working capital needs.

 To implement our  business strategy, we  will also need  to seek  additional
 financing.   There  is  no assurance  that  adequate  levels  of  additional
 financing will  be  available at  all  or  on acceptable  terms.  Also,  any
 additional financing  will  likely result  in  significant dilution  to  our
 existing stockholders.  If we are  unable to obtain additional financing  on
 terms that are acceptable to us, we could be forced to dispose of assets  to
 make  up  for  any  shortfall  in  the  payments  due  on  our  debt   under
 circumstances that might not be favorable to realizing the highest price for
 those assets.  A  portion of our assets  consists of intangible assets,  the
 value of which will depend upon a variety of factors, including the  success
 of our business.  As a result, if we do need  to sell any of our assets,  we
 cannot assure  you that  our assets  could be  sold quickly  enough, or  for
 amounts sufficient, to meet our obligations.

 We face competition from numerous, mostly well-capitalized sources

 The market for  our products and  services is highly  competitive.  We  face
 competition from  multiple  sources, virtually  all  of which  have  greater
 financial resources  and a  substantial presence  in our  markets and  offer
 products or services similar to our services.  Therefore, we may not be able
 to successfully compete in our markets,  which could result in a failure  to
 implement our business strategy, adversely affecting our ability to  attract
 and retain new customers.  In addition, competition within the industries in
 which we operate  is characterized by,  among other factors,  price and  the
 ability to offer  enhanced services.   Significant  price competition  would
 reduce the  margins realized  by us  in our  telecommunications  operations.
 Many of  our  competitors have  greater  financial resources  to  devote  to
 research, development and marketing, and may be able to respond more quickly
 to new or emerging technologies and changes in customer requirements.  If we
 are unable to  provide value-added Internet  products and  services then  we
 will be unable  to compete in  certain segments of  the market, which  could
 have an adverse impact on our business.

 The regulatory environment in our industry is very uncertain

 The legal and regulatory environment pertaining to the Internet is uncertain
 and changing rapidly as the use of the Internet increases.  For example,  in
 the United States, the  FCC is considering whether  to impose surcharges  or
 additional regulations upon certain providers of Internet telephony.

 In addition, the regulatory treatment of  Internet telephony outside of  the
 United States varies  from country to  country.  There  can be no  assurance
 that there will not be legally  imposed interruptions in Internet  telephony
 in these and other foreign countries.  Interruptions or restrictions on  the
 provision of Internet  telephony in foreign  countries may adversely  affect
 our ability to continue to offer services in those countries, resulting in a
 loss of customers and revenues.

 New regulations could increase the cost of doing business over the  Internet
 or restrict or prohibit the delivery  of our products or services using  the
 Internet. In addition to new regulations being adopted, existing laws may be
 applied to the Internet.  Newly existing laws may cover issues that  include
 sales and  other  taxes, access  charges,  user privacy,  pricing  controls,
 characteristics and quality of  products and services, consumer  protection,
 contributions to the  USF, cross-border commerce,  copyright, trademark  and
 patent infringement, and  other claims based  on the nature  and content  of
 Internet materials.

 Changes in the technology relating to Internet telephony could threaten  our
 operations

 The industries in  which we  compete are  characterized, in  part, by  rapid
 growth, evolving industry standards,  significant technological changes  and
 frequent product enhancements.  These characteristics could render  existing
 systems and strategies obsolete  and require us to  continue to develop  and
 implement new products  and services, anticipate  changing consumer  demands
 and respond to emerging  industry standards and  technological changes.   No
 assurance can be given that we  will be able to  keep pace with the  rapidly
 changing  consumer  demands,  technological  trends  and  evolving  industry
 standards.

 We need to develop and maintain strategic relationships around the world  to
 be successful

 Our international business,  in part, is  dependent upon relationships  with
 distributors, governments  or providers  of telecommunications  services  in
 foreign markets.   The failure to  develop or  maintain these  relationships
 could have an adverse impact on our business.

 We rely on three key senior executives

 Our success is  dependent on  our senior  management team  of John  Jenkins,
 David Hess and Allen Sciarillo and our future success will depend, in  large
 part, upon our ability to retain these three individuals.

 The expansion of our VoIP product offerings is essential to our survival

 We  intend  to  expand   our  VoIP  network  and   the  range  of   enhanced
 telecommunications services that we provide. Our expansion prospects must be
 considered in  light  of the  risks,  expenses and  difficulties  frequently
 encountered by companies in new and rapidly evolving markets.

 Our OTC  Bulletin Board  listing negatively  affects  the liquidity  of  our
 common stock

 Our common stock currently trades on the OTC Bulletin Board.  Therefore,  no
 assurances can be given that a liquid trading market will exist at the  time
 any investor  desires to  dispose of  any  shares of  our common  stock.  In
 addition, our common stock is subject  to the so-called "penny stock"  rules
 that impose  additional sales  practice requirements  on broker-dealers  who
 sell such  securities  to  persons  other  than  established  customers  and
 accredited investors (generally defined as an  investor with a net worth  in
 excess of  $1  million or  annual  income exceeding  $200,000,  or  $300,000
 together with a spouse).  For transactions covered by the penny stock rules,
 a broker-dealer must make a suitability determination for the purchaser  and
 must have received the purchaser's written consent to the transaction  prior
 to  sale.   Consequently,  both  the  ability  of  a  broker-dealer  to sell
 our common stock  and  the ability  of holders of our  common stock to  sell
 their securities in the secondary market  may  be  adversely  affected.  The
 Securities and Exchange  Commission has  adopted regulations  that define  a
 "penny stock" to be an equity security that has a market price of less  than
 $5.00  per  share,  subject  to  certain  exceptions.  For  any  transaction
 involving a  penny stock,  unless exempt,  the rules  require the  delivery,
 prior to the  transaction, of a  disclosure schedule relating  to the  penny
 stock market.  The  broker-dealer must disclose  the commissions payable  to
 both the broker-dealer and the registered representative, current quotations
 for the securities and, if the broker-dealer is to sell the securities as  a
 market maker,  the broker-dealer  must disclose  this fact  and the  broker-
 dealer's presumed control over the market. Finally, monthly statements  must
 be sent disclosing recent price information for the penny stock held in  the
 account and information on the limited market in penny stocks.


 Item 2. Description of Property.

 We lease approximately 6,800  square feet in two  locations in Los  Angeles,
 California.   Our principal  executive office  is  located at  17383  Sunset
 Boulevard, Suite  350,  in Los  Angeles,  California.   Our  operations  and
 information systems are located in Los Angeles and New York, New York, where
 we lease 104 square  feet under a  month-to-month co-location agreement.  We
 also have a sales and administrative  office in Johannesburg, South  Africa.
 We believe  that our  facilities are  sufficient for  the operation  of  our
 business for the  foreseeable future.   The expiration dates  of the  above-
 mentioned lease agreements are as follows:

 February 28, 2006   South Africa office
 July 12, 2006       Los Angeles - operations and information systems office
 April 30, 2007      Los Angeles - executive office

 We lease  office  space  for  certain  sales  staff  and  our  President  in
 Englewood, New Jersey on a month-to-month basis.


 Item 3. Legal Proceedings.

 On  June 12, 2001,  Cygnus  Telecommunications Technology,  LLC  ("Cygnus"),
 filed a patent  infringement suit (case  no. 01-6052) in  the United  States
 District  Court,  Central  District  of  California,  with  respect  to  our
 "international reorigination" technology.  The injunctive relief that Cygnus
 sought in this suit has been denied, but Cygnus continues to seek a  license
 fee for the use of the technology.

 In August  2002, Cygnus  filed  a motion  for  a preliminary  injunction  to
 prevent  us  from  providing  "re-origination" services.  We filed  a  cross
 motion for summary judgment of non-infringement.  Both motions were  denied.
 On August 22,  2003, we re-filed  the motion for  summary judgment for  non-
 infringement.   In  response to  this  filing,  in August  2004,  the  court
 narrowly defined the issue to relate to a certain re-origination technology,
 which we believe we do not now use, nor have we ever utilized to provide any
 of our telecommunications services.  On  August 17, 2005, the United  States
 District Court for the Northern District of California issued a stay in  the
 lawsuit for the purpose of reexamining the Cygnus patent.  This  stay is the
 result of a reexamination request received  by the United States Patent  and
 Trademark Office ("USPTO"), whereby the USPTO has issued a decision that the
 patents  are  invalid.  Consequently,  further proceedings are expected.  We
 intend to continue defending this case  vigorously, and though our  ultimate
 legal and  financial liability  with respect  to  such legal  proceeding  is
 expected to be minimal,  it cannot be estimated  with any certainty at  this
 time.

 The State of Texas  ("Texas") performed a sales  tax audit of Canmax  Retail
 Systems ,  a current  subsidiary of  ours, and  former operating  subsidiary
 providing retail  automation software  and related  services to  the  retail
 petroleum and  convenience store  industries, for  the years  1995 to  1999.
 Texas determined that Canmax Retail Systems did not properly remit sales tax
 on certain transactions, including asset purchases and software  development
 projects that Canmax Retail Systems performed  for specific customers.   Our
 current and former  management filed exceptions,  through our outside  sales
 tax consultant, to Texas' audit  findings, including the non-taxable  nature
 of certain transactions and the failure  of Texas to credit our account  for
 sales tax remittances.   In correspondence  from Texas in  June 2003,  Texas
 agreed to consider offsetting remittances received by Canmax Retail  Systems
 during the audit  period.  Texas  has  refused to  consider other  potential
 offsets.  Based on  this correspondence  with  Texas,  our estimate  of  the
 potential liability was originally recorded  at $350,000 during fiscal  year
 2003.  Based on further correspondence with Texas, this estimated  liability
 was increased to $1.1 million during the first quarter of fiscal year  2004.
 Since  this  sales  tax  liability  represents  an  adjustment  to   amounts
 previously reported in discontinued operations, it was classified separately
 during the first quarter of fiscal year 2004 in discontinued operations, and
 is included  in the  October 31,  2004 consolidated  balance sheet  in  "Net
 current liabilities from discontinued operations".

 On August 5, 2005, the Texas filed  a lawsuit in the 53rd Judicial  District
 Court  of Travis County,  Austin, Texas  against  our Company.  The  lawsuit
 requests  payment  of  approximately   $1,162,000  including  penalties  and
 interest for state and local sales tax.  During the third quarter  of fiscal
 year  2005,  we  accrued  an additional $62,000,  increasing  the  estimated
 liability to $1.162 million. This amount is included in the October 31, 2005
 consolidated balance sheet in "Net  current  liabilities  from  discontinued
 operations".  We  believe  that  we  will  be  able  to negotiate  a reduced
 settlement amount  with the state,  although there can be no assurance  that
 we will be  successful with respect to such negotiations.  We  will continue
 to  aggressively pursue  the collection  of  unpaid  sales taxes from former
 customers  of Canmax Retail Systems, primarily  Southland  Corporation,  now
 7-Eleven  Corporation  ("7-Eleven"),  as  a  majority  of the amount owed to
 the  Texas  is the result of uncollected taxes from  the sale of software to
 7-Eleven during the period under audit.  However, there can be  no assurance
 that we will be successful with respect to such collections.

 On January 12, 2004, we filed a suit against 7-Eleven in the 162nd  District
 Court in Dallas, Texas.  Our suit claims  a breach of agreement on the  part
 of 7-Eleven in failing to reimburse  us for taxes paid  to Texas as well  as
 related taxes for which  we are currently being  held responsible by  Texas.
 Our suit seeks reimbursement for the  taxes paid and a determination by  the
 court that 7-Eleven is responsible for paying the remaining tax liability to
 Texas.

 On July 20, 2004,  we filed a  suit against Q  Comm International, Inc.  ("Q
 Comm") in Federal Court in  the Central District of  Utah.  Our suit  claims
 damages of $4  million plus  attorneys' fees  and costs  resulting from  the
 breach of  a purchase  agreement by  Q  Comm relating  to  the sale  of  our
 internally  constructed   equipment  for   the  prepaid   telecommunications
 industry.  Pursuant to the terms of the purchase agreement, we would deliver
 the source  code of  certain proprietary  software in  consideration for  an
 aggregate purchase  price of  $4 million,  of which  $1 million  was due  at
 closing and the remainder was due over three years.  Following execution  of
 the agreement, we tendered the software  source code to Q Comm.  However,  Q
 Comm failed to pay us  the initial amount due  under the agreement and  made
 copies of the source code without our permission.

 During the fourth quarter of fiscal  2005, we entered into a Settlement  and
 Release Agreement with Q Comm.  The  Agreement releases Q Comm from any  and
 all claims in connection  with our lawsuit  against Q Comm  for breach of  a
 purchase  agreement.  In connection with  the release, we  agreed to a  cash
 settlement of $225,000, which was received on August 10, 2005.  This  amount
 was recorded as "Gain on settlement of liabilities/legal settlement"  during
 the fiscal year ended October 31, 2005.


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

 Our annual stockholders meeting was held on October 25, 2005.  The following
 proposals were approved at the meeting:

   *  Proposal 1 - For the election of John Jenkins, David Hess, Allen
      Sciarillo, Lawrence Vierra and Robert M. Fidler to serve as our
      directors until the 2006 Annual Meeting of Stockholders;

   *  Proposal 2 - For amending our certificate of incorporation to increase
      the amount of authorized common stock from 84,169,100 shares to
      175,000,000 shares;

   *  Proposal 3 - For amending our certificate of incorporation to change
      our company name to Rapid Link, Incorporated;

   *  Proposal 4 - For the approval to amend our 2002 Equity Incentive Plan
      to increase the number of shares of common stock authorized for
      issuance from 2,000,000 to 4,000,000;

   *  Proposal 5 - For the ratification of the appointment of KBA Group LLP
      to serve as independent auditors for the 2005 fiscal year.

 The following  table  sets  forth the  voting  results  for  each  proposal,
 including the votes cast for each director:


                                  For            Against        Abstain
                               ----------        -------        -------
          Proposal 1
          ----------
          John Jenkins         26,635,411         78,160         23,220
          David Hess           26,635,411         78,160         23,220
          Allen Sciarillo      26,635,371         78,200         23,220
          Lawrence Vierra      26,712,171          1,400         23,220
          Robert M. Fidler     26,713,431            140         23,220

          Proposal 2           15,714,389        173,353         21,066
          Proposal 3           15,883,995         32,433          1,380
          Proposal 4           14,225,747        184,072        341,302
          Proposal 5           26,713,445         10,286         13,060


                                   PART II

 Item 5. Market for Common Equity and Related Stockholder Matters.

 Market For Our Common Stock

 Our common stock,  $0.001 par  value, is quoted  on the  OTC Bulletin  Board
 under the trading symbol "RPID".  Each share ranks equally as to  dividends,
 voting rights,  participation  in assets  on  winding-up and  in  all  other
 respects. No  shares  have  been  or  will be  issued  subject  to  call  or
 assessment.  There are  no preemptive rights,  provisions for redemption  or
 for either cancellation or surrender or  provisions for sinking or  purchase
 funds.

 The following table sets forth, for  the fiscal periods indicated, the  high
 and low closing sales price per share of our common stock as reported on the
 OTC Bulletin Board.   The market  quotations presented reflect  inter-dealer
 prices, without  retail  mark-up,  mark-down  or  commissions  and  may  not
 necessarily reflect actual transactions.


                                                  COMMON STOCK
                                                 CLOSING PRICES
                                              --------------------
                                               HIGH           LOW
                                              ------        ------
 FISCAL 2004
      First Quarter . . . . . . . . . . .     $ 0.25        $ 0.17
      Second Quarter  . . . . . . . . . .     $ 0.23        $ 0.10
      Third Quarter . . . . . . . . . . .     $ 0.18        $ 0.12
      Fourth Quarter  . . . . . . . . . .     $ 0.16        $ 0.10

 FISCAL 2005
      First Quarter . . . . . . . . . . .     $ 0.68        $ 0.10
      Second Quarter  . . . . . . . . . .     $ 0.40        $ 0.18
      Third Quarter . . . . . . . . . . .     $ 0.51        $ 0.14
      Fourth Quarter  . . . . . . . . . .     $ 0.20        $ 0.11


 The closing price for our  common stock on January  16, 2006 as reported  on
 the OTC Bulletin Board was $0.12.

 Dividends

 We have never declared or paid any cash dividends on our common stock and do
 not presently  intend to  pay cash  dividends  on our  common stock  in  the
 foreseeable future. We intend to retain future earnings for reinvestment  in
 our business.

 Holders of Record

 There were 2,469 stockholders of record as of January 15, 2006.

 Recent Sales of Unregistered Securities

 None.


 Item 6. Management's Discussion and Analysis or Plan of Operation.

 This Annual  Report on  Form  10-KSB contains  "forward-looking  statements"
 within the meaning of Section 27A of the Securities Act of 1933 and  Section
 21E of the  Securities Exchange  Act of 1934.   These  statements relate  to
 expectations concerning matters that are not  historical facts.  Words  such
 as "projects",  "believe",  "anticipates",  "estimate",  "plans",  "expect",
 "intends", and  similar  words  and expressions  are  intended  to  identify
 forward-looking statements.  Although  we believe that such  forward-looking
 statements are reasonable, we cannot assure you that such expectations  will
 prove to be  correct.   Factors that could  cause actual  results to  differ
 materially from such  expectations are disclosed  herein including,  without
 limitation, in the "Risk Factors" located in  PART I, Item 1.  All  forward-
 looking statements attributable  to our Company  are expressly qualified  in
 their entirety by such  language and we do  not undertake any obligation  to
 update any  forward-looking statements.   You  are also  urged to  carefully
 review and  consider the  various disclosures  we have  made which  describe
 certain factors,  which affect  our business  throughout this  Report.   The
 following discussion  and analysis  of financial  condition and  results  of
 operations covers the years  ended October 31, 2005 and  2004 and should  be
 read in  conjunction with  our Financial  Statements and  the Notes  thereto
 commencing at page F-1 hereof.

 General

 On November 2, 1999, we consummated  the DTI Acquisition and, in the  second
 quarter of fiscal 2000,  we shifted focus toward  our global VoIP  strategy.
 This change in focus has  led to a significant  shift from our prepaid  long
 distance operations toward higher margin international wholesale and  retail
 telecommunications opportunities.   This strategy  allows us  to form  local
 partnerships with foreign PTTs and to  provide IP enabled services based  on
 the in-country regulatory environment affecting telecommunications and  data
 providers. In the third quarter of fiscal 2000, we further concentrated  our
 efforts toward our  global VoIP  telecommunications strategy  by moving  our
 operations to Los Angeles, California.  This consolidation and reduction  in
 staff has allowed us to significantly reduce our overhead, and although  our
 operations have  not  yet  produced positive  cash  flow,  we  believe  that
 continued cost  reductions and  moderate revenue  growth would  allow us  to
 achieve positive results in the near future.

 On October 12, 2001, we completed the acquisition from RLI of certain assets
 and executory contracts  of Rapid  Link, USA, Inc.  and 100%  of the  common
 stock  of  Rapid  Link  Telecommunications,  GmbH,  a  German  company.  RLI
 provides integrated data and voice communications services to both wholesale
 and retail customers around the world. RLI built a large residential  retail
 customer base in Europe and Asia, using RLI's network to make  international
 calls anywhere  in  the world.  Furthermore,  RLI developed  a VoIP  network
 using Clarent and Cisco technology, which we have used to take advantage  of
 wholesale opportunities  where  rapid  deployment and  time  to  market  are
 critical.

 On  November 19, 2002  we  entered into  an  agreement with  Global  Capital
 Funding Group, L.P. that provided us with a two-year loan of $1.25  million,
 with a maturity date  of November 8,  2004.  $443,000  of the proceeds  from
 this financing were  used to pay  off the remaining  balance of Dial  Thru's
 April 2001 convertible  debenture with  Global Capital  while the  remaining
 $807,000 has been used for our Company's ongoing working capital needs.   On
 June 1, 2005, the maturity date was extended to February 29, 2008.

 On July 24, 2003 we entered into an agreement with GCA Strategic  Investment
 Fund Limited that provided us with a  152-day loan of $550,000.  On  January
 2, 2004,  per  the  terms  of  this  loan  agreement,  this  loan  became  a
 convertible debenture with a  maturity date of November  8, 2004.  The  loan
 proceeds have been used for our Company's ongoing working capital needs.  On
 June 1, 2005, the maturity date was extended to November 20, 2006.

 On August 1, 2003, our German subsidiary, Rapid Link Telecommunications GmbH
 received approval for its insolvency filing and was turned over to a trustee
 who is responsible for liquidating the  operation.  We have determined  that
 we no longer control the operations  of this subsidiary and that our  parent
 entity has  no  legal  obligation  to pay  the  liabilities  of  Rapid  Link
 Telecommunications, GmbH.

 The telecommunications  industry continues  to evolve  towards an  increased
 emphasis on IP related products and services.  We have focused our  business
 towards these types of products and  services for the last couple of  years.
 Furthermore, we  believe the  use  of the  Internet  to provide  IP  related
 telephony services  to  the end  user  customer,  either as  a  stand  alone
 solution or bundled  with other  IP products,  will continue  to impact  the
 industry as large companies like Time Warner and AT&T look to capitalize  on
 their existing cable infrastructures, and smaller companies look to  provide
 innovative solutions to  attract commercial and  residential users to  their
 product offerings.

 We are focused on the growth of our VoIP business by adding new products and
 services that we  can offer to  end user customers.   We  are attempting  to
 transition our current customers, and attract new customers through the sale
 of specialized VoIP Internet Access Devices, or IAD's, that allow  customers
 to connect their phones to  their existing high-speed Internet  connections.
 These IADs  allow the  user  to originate  phone  calls over  the  Internet,
 thereby bypassing the normal costs  associated with originating phone  calls
 over existing land lines.   By avoiding  these costs, we  are able to  offer
 lower priced services to these customers, which we believe will allow us  to
 attract additional users.  We also believe there will be considerable demand
 for this type of product  in certain foreign markets  where end users pay  a
 significant premium to  their local phone  companies to  make long  distance
 phone calls.  We are targeting  business and residential customers, as  well
 as members of the US military.  While we expect the growth in our  customers
 and suppliers and the introduction of innovative product offerings to retail
 users, specifically IADs,  to have  a positive  impact on  our revenues  and
 earnings, we cannot predict our ability  to significantly grow this line  of
 business.  To  date,  we have  not  attracted a  significant number  of  new
 customers.  The revenue and costs associated with the IAD product  offerings
 will depend on the  number of customers  and contracts we  obtain.  In  many
 ways, our ability to maintain operations  in the foreseeable future will  be
 dictated by  our  ability to  quickly  deploy VoIP  products  into  selected
 markets and to realize high quality revenues from these products and related
 telecommunications sources.  Any delay in our expansion of VoIP products and
 services will adversely  affect our financial  condition and  cash flow  and
 could ultimately cause us to greatly reduce or even cease operations.

 We continue to  seek opportunities to  grow our  business through  strategic
 acquisitions that will complement our retail strategy as well as adding  key
 personnel that have demonstrated a proven  track record in sales,  marketing
 and operations of retail telecommunications organizations, especially in the
 area of retail VoIP.

 See  "Risk Factors"  above for  discussion of  the impact  of market  risks,
 financial risks and other uncertainties.   Please also see  "Forward-Looking
 Statements" above relating to  statements other than historical  information
 or statements of current condition.

 Critical Accounting Policies

 The consolidated financial  statements include accounts  of our Company  and
 all of  our  majority-owned  subsidiaries.   The  preparation  of  financial
 statements in conformity  with accounting principles  generally accepted  in
 the United States requires us to  make estimates and assumptions in  certain
 circumstances that affect amounts reported in the accompanying  consolidated
 financial statements  and  related footnotes.  In preparing these  financial
 statements, we have made our best estimates and judgments of certain amounts
 included  in  the   financial  statements,  giving   due  consideration   to
 materiality.  We do not believe there is a great likelihood that  materially
 different amounts  would  be reported  related  to the  accounting  policies
 described below.  However, application of these accounting policies involves
 the exercise of judgment and use  of assumptions as to future  uncertainties
 and, as a result, actual results could differ from these estimates.

 Revenue Recognition

 For a majority of  our products, our  revenues are generated  at the time  a
 customer uses our network  to make a phone  call.  We  sell our services  to
 SMEs and end-users who utilize our network for international  re-origination
 and dial thru services,  and to other providers  of long distance usage  who
 utilize our network  to deliver  domestic and  international termination  of
 minutes to  their own  customers.   At  times we  receive payment  from  our
 customers in advance of  their usage, which we  record as deferred  revenue,
 recognizing revenue as calls are made.

 For our newer VoIP product offerings,  specifically our Rapid Link  service,
 we are required to recognize revenue in accordance with Emerging Issues Task
 Force ("EITF")  consensus No.  00-21, "Accounting  for Revenue  Arrangements
 with Multiple Deliverables"  which requires that  revenue arrangements  with
 multiple deliverables be divided  into separate units  of accounting if  the
 deliverables  in  the  arrangement  meet  specific  criteria.  In  addition,
 arrangement consideration  must be  allocated among  the separate  units  of
 accounting based on  their relative fair  values, with certain  limitations.
 The provisioning of  the Rapid Link  service with  the accompanying  desktop
 terminal adapter or other customer  premise equipment constitutes a  revenue
 arrangement with multiple deliverables. In  accordance with the guidance  of
 EITF No. 00-21, we allocate Rapid Link revenues, including activation  fees,
 among the  customer  premise  equipment and  subscriber  services.  Revenues
 allocated to  the  customer  premise equipment  are  recognized  as  product
 revenues at the end of 30 days after order placement, provided the  customer
 does not cancel their Rapid Link service. All other revenues are  recognized
 as license and service revenues when  the related services are provided.  We
 defer the cost of goods sold of products sold for which the end customer  or
 distributor has  a  right  of return.  The  cost  of the  products  sold  is
 recognized, contemporaneously  with the  recognition  of revenue,  when  the
 subscriber has  accepted  the  service.   To  date,  our  new  VoIP  product
 offerings have generated insignificant revenues.

 The Securities and Exchange Commission's Staff Accounting Bulletin No.  104,
 "Revenue Recognition",  provides guidance  on the  application of  generally
 accepted accounting principles to selected  revenue recognition issues.   We
 have concluded that  our revenue recognition  policy is  appropriate and  in
 accordance  with  generally   accepted  accounting   principles  and   Staff
 Accounting Bulletin No. 104.

 Allowance for Uncollectible Accounts Receivable

 Accounts receivable are reduced by an allowance for amounts that may  become
 uncollectible in the future.  All of our receivables are due from commercial
 enterprises  and  residential  users  in  both  domestic  and  international
 markets.   The  estimated  allowance  for  uncollectible  amounts  is  based
 primarily on our evaluation of the financial condition of the customer,  and
 our estimation of the customer's willingness to pay amounts due.  We  review
 our credit  policies  on  a regular  basis  and  analyze the  risk  of  each
 prospective customer individually in order to minimize our risk.

 Goodwill

 Effective November 1, 2001, we adopted SFAS No, 141, "Business Combinations"
 ("SFAS 141") and SFAS No. 142, "Goodwill and Other Intangible Assets" ("SFAS
 142").  SFAS 141 requires that the purchase method of accounting be used for
 all business combinations initiated after June 30, 2001, and also  specifies
 the criteria  for  the  recognition of  intangible  assets  separately  from
 goodwill.  Under SFAS 142, goodwill is no longer amortized but is subject to
 an impairment  test  at least  annually  or more  frequently  if  impairment
 indicators arise.  In accordance with SFAS 142, an annual impairment test of
 goodwill was  performed by  an independent  valuation firm  in each  of  the
 fourth  quarters  of  fiscal year  2005  and  2004.  The  valuation  process
 appraised  our  assets  and  liabilities  using  a  combination  of  present
 value  and  multiple of earnings valuation techniques.  The  results of both
 impairment tests indicated goodwill was not impaired.

 We record goodwill when  the consideration paid  for an acquisition  exceeds
 the fair value of net tangible and identifiable intangible assets  acquired.
 We measure  and test  goodwill for  impairment on  an annual  basis or  more
 frequently if we believe indicators of impairment exists. Performance of the
 impairment test involves  a two-step process.  The first  step compares  the
 fair value of  our single reporting  unit to its  carrying amount. The  fair
 value of  the  reporting  unit  is  determined  by  calculating  the  market
 capitalization of the reporting unit as  derived from quoted market  prices,
 and further  substantiated  through  the use  of  other  generally  accepted
 valuation methods. A potential  impairment exists if the  fair value of  the
 reporting  unit  is  lower  than  its  carrying  amount.  Historically,  the
 impairment test has shown that the  carrying value is less than fair  value.
 The second step of the process  is only performed if a potential  impairment
 exists, as indicated by  step one, and  involves determining the  difference
 between the  fair values  of the  reporting unit's  net assets,  other  than
 goodwill, as  compared to  the fair  value  of the  reporting unit.  If  the
 difference is less than  the net book value  of goodwill, impairment  exists
 and is recorded. We determine our  reporting units, for purposes of  testing
 for impairment, by determining (i) how  we manage our operations, (ii) if  a
 component of an  operating unit constitutes  a business  for which  discrete
 financial information is available and our management regularly review  such
 financial information, and (iii) how the acquired entity is integrated  with
 our operations. Based on these criteria, we determined that we have a single
 reporting unit.

      In order to determine the fair value of our reporting unit under SFAS
      142, we consider the following two approaches:

           * Market Approach  -  Under the market approach,  recent sales  of
             comparable  companies or  securities are  analyzed to  determine
             the value for a  particular asset under study.  Adjustments  are
             made to  the sales data to  account for differences between  the
             subject asset and the comparables.  The market approach is  most
             applicable  to assets  that are  homogenous  in nature  and  are
             actively traded.   Relative to  other approaches  to value,  the
             key  strength  of  the  market  approach  is  that  it  provides
             objective indications  of value while  requiring relatively  few
             assumptions be made.

           * Income Approach  -  This approach measures  the present worth of
             anticipated future  net cash  flows generated  by the  business.
             Net cash flows are  forecast for an appropriate period and  then
             discounted to present value using an appropriate discount  rate.
             Net  cash flow  forecasts require  analysis of  the  significant
             variables  influencing  revenues,  expenses,  working   capital,
             and  capital  investment.  An  income  approach  methodology  is
             generally   useful  because   it  accounts   for  the   specific
             contribution of  fundamental factors  impacting those  variables
             that affect the value of the business.

 According to SFAS 142, quoted market  prices in active markets are the  best
 evidence of fair value and shall be used as the basis for the measurement of
 fair value, if available.  As of October 31, 2005, our market capitalization
 was $3,222,690, determined by taking the shares outstanding as of that  date
 multiplied by our stock price of $0.11.  We added interest bearing debt  and
 operating liabilities  (excluding net  current liabilities  of  discontinued
 operations), adjusted downward to a fair value estimate of 25%, resulting in
 a fair value of assets of approximately $5.3 million.   This amount  exceeds
 the carrying value of our assets (the value of our assets as reported in our
 financial statements), including goodwill, of $3,218,596.  While our  market
 capitalization renders a minority interest valuation, because shares of  our
 Company represent minority interests, the fair  value of assets exceeds  its
 carrying value  even  without  the  application  of  a  control  premium  as
 recommended by SFAS 142.   However, we believe  that the application of  the
 market approach necessitates  additional analysis for  three reasons (i)  we
 have generated no analyst coverage to provide information about our stock to
 the public,  suggesting that  the market  price  may not  reflect  available
 information,  (ii)  our  stock  price  demonstrated  volatility  as  of  the
 valuation date, and (iii)  our stock is thinly  traded with no  organization
 making an active market in the stock.  These factors suggest that our  stock
 price, when  taken in  isolation, may  not be  sufficient evidence  of  fair
 value. In  estimating  the fair  value  of  a reporting  unit,  a  valuation
 technique  based  on  multiples  of  earnings  or  revenues  or  a   similar
 performance measure may  be used if  that technique is  consistent with  the
 objective of  measuring fair  value.   As  further  support for  our  market
 approach, we calculated the Business Enterprise Value ("BEV") for five other
 telecommunications companies, which provide  services similar to those  that
 we provide.  The BEV is determined by taking the market capitalization of  a
 public enterprise, adding their debt  and subtracting any cash  equivalents.
 The resulting value  is divided by  annual revenue in  order to determine  a
 reasonable multiple that can be applied to us.  We averaged the multiple  of
 these five companies, trading on average  at 2.6 times their annual  revenue
 obtained from their most recent published financials, and applied the result
 to our 2005 fiscal  year revenues.   The resulting BEV  for our Company  was
 well in excess  of the  fair value of  our assets  calculated above.   As  a
 result, we  determined  that the  fair  value  of our  Company  exceeds  its
 carrying amount, and therefore that goodwill is not impaired.

 Financing, Warrants and Amortization of Warrants and Fair Value Determination

 We have traditionally financed our operations  through the issuance of  debt
 instruments that are convertible into our common stock, at conversion  rates
 at or  below the  fair market  value of  our  common stock  at the  time  of
 conversion,  and  typically  include  the issuance  of  warrants.   We  have
 recorded debt discounts in connection  with these financing transactions  in
 accordance  with  Emerging   Issues  Task   Force  Nos.   98-5  and   00-27.
 Accordingly, we recognize the beneficial conversion feature imbedded in  the
 financings and the fair value of  the related warrants on the balance  sheet
 as debt discount.   The  debt discount  is amortized  over the  life of  the
 respective debt instrument.

 Carrier Disputes

 We review  our vendor  bills on  a monthly  basis and  periodically  dispute
 amounts invoiced by our carriers.  We  review our outstanding disputes on  a
 quarterly basis as part of the overall review of our accrued carrier  costs,
 and adjust our liability based on management's estimate of amounts owed.

<PAGE>
<TABLE>

 Results of Operations

 Our operating results for the last two fiscal years are as follows:

                                                       % Change
                                                        2004 to
                                                % of     2005                    % of
                                 Year Ended   Revenue  Increase   Year Ended   Revenue
                                 Oct 31 2005    2005    (Decr)    Oct 31 2004    2004
                                 -----------    ----    ------    -----------    ----
 <S>                            <C>             <C>     <C>      <C>             <C>
 REVENUES                       $  9,827,049    100%      (27%)  $ 13,380,510    100%

 COSTS AND EXPENSES
  Costs of revenues                7,713,349     78%      (23%)    10,045,063     75%
  Sales and marketing                205,973      2%      (49%)       400,559      3%
  General and administrative       3,227,609     33%        8%      2,990,630     22%
  Depreciation and amortization      557,131      6%      (10%)       615,883      5%
  Gain on disposal of equipment       (8,800)     -       100%              -      -
  Gain on settlement of
   liabilities/legal settlement     (225,000)    (2%)     (52%)      (466,000)    (3%)
                                 -----------    ----    ------    -----------    ----
     Total costs and expenses     11,470,262    117%      (16%)    13,586,135    102%
                                 -----------    ----    ------    -----------    ----

     Operating loss               (1,643,213)   (17%)     723%       (205,625)    (2%)

 OTHER INCOME (EXPENSE)
   Interest expense and
     financing costs                (870,615)    (9%)      42%       (613,511)    (5%)
   Foreign currency
     exchange gains                   10,486      -       (60%)        24,919      -
                                 -----------    ----    ------    -----------    ----
     Total other expense, net       (860,129)    (9%)      46%       (588,592)    (4%)
                                 -----------    ----    ------    -----------    ----

 LOSS FROM CONTINUING OPERATIONS  (2,506,342)   (25%)     222%       (794,217)    (6%)

 INCOME (LOSS) FROM
   DISCONTINUED OPERATIONS           (62,000)    (1%)    (104%)     1,501,147     11%
                                 -----------    ----    ------    -----------    ----
 NET INCOME (LOSS)              $ (2,565,342)   (26%)   (470)%   $    706,930     (5%)
                                 ===========    ====    ======    ===========    ====

 INCOME (LOSS) PER SHARE:
   Basic and diluted income
   (loss) per share
     Continuing operations           $(0.11)                           $(0.05)
     Discontinued operations              -                              0.09
                                 -----------                      -----------
                                     $(0.11)                           $ 0.04
                                 ===========                      ===========

</TABLE>

 Results of Operations - 2005 Versus 2004

 Operating Revenues

 Our revenues decreased from $13.4 million for the fiscal year ended  October
 31, 2004  to  $9.8  million  for the fiscal  year ended October 31, 2005,  a
 27% decline.  Wholesale  and  retail  revenues decreased  by  27%  and  26%,
 respectively, period to period.

 The decrease in  wholesale revenues for  the fiscal year  ended October  31,
 2005  compared  to  fiscal  year  2004  is  attributable  to  a  decrease in
 the  number of  termination  opportunities  available  to  us  to  offer  to
 our  customers.   Due  to  the   competitive   nature   of   the   wholesale
 telecommunications business, our customers frequently request a reduction in
 the per  minute  termination  rates that  we  offer  them.   At  times,  our
 suppliers are not  able to offer  us lower rates  in order  to maintain  the
 minutes we are  terminating to them.   As a  result, our wholesale  revenues
 fluctuate depending on the number of termination opportunities available  to
 us at any  one time.   We are  working with new  providers in  an effort  to
 recapture  our  lost  revenue,  although  the  ultimate  results  of   these
 discussions cannot be  predicted with any  certainty.  If  we are unable  to
 attract and  retain new  wholesale customers,  our wholesale  revenues  will
 continue to erode.

 The decrease in retail revenues for  the fiscal year ended  October 31, 2005
 compared  to  fiscal  year  2004  is  primarily  attributable  to  increased
 competition in our largest foreign  markets, including competition from  the
 incumbent phone company in each market.  Furthermore, a significant  portion
 of our retail  business comes  from members  of the  United States  military
 stationed in foreign  markets.  The March 2003  redeployment of troops  into
 Iraq, where  we  have  not  historically  provided  long  distance  service,
 resulted in a decline  in our retail sales  to these military customers  who
 were previously stationed in foreign markets  that we serviced.  During  the
 first five months of  the current fiscal year,  we offered services to  U.S.
 troops in Iraq on a limited basis.  We are no longer providing services  out
 of Iraq.  We are exploring opportunities to grow our retail business through
 the introduction of new products and services, utilizing our in-house  sales
 group and our outside agents, as  well as marketing through web portals  and
 magazines, focusing our  efforts principally on  the sale of  our new  Rapid
 Link VoIP products, which allow users to connect specialized Internet Access
 Devices to their existing high speed Internet connections.  If we are unable
 to stabilize our retail revenues, primarily from the U.S. military, and grow
 our retail revenues from VoIP-based products, this category of revenue  will
 also continue to decline.

 Costs of Revenues

 Our costs of revenues  as a percentage of  revenues have increased from  75%
 for the fiscal year ended October 31, 2004 to 78% for the fiscal year  ended
 October 31, 2005. Included within our costs of revenues for fiscal year 2005
 is a reduction of costs in the amount of $283,138 relating to the  favorable
 resolution  of  a  dispute  with  one  of  our  vendors.  These  costs  were
 originally recorded to costs of revenues in prior periods.  Had this dispute
 resolution not occurred during fiscal year 2005, our costs of revenues as  a
 percentage of revenues would have been 81% for the year.  This increase  was
 primarily due to a lower average margin per minute relating to our wholesale
 business.  As a majority of our costs of revenues are variable, based on per
 minute transportation costs, costs of revenues  as a percentage of  revenues
 will fluctuate, from year to year, depending on the traffic mix between  our
 wholesale and retail products and total revenue for each year.

 Sales and Marketing Expenses

 A significant component  of our revenue  is generated by  outside agents,  a
 small in-house sales force, and marketing  through web portals and  magazine
 advertising, which  is  managed by  a  small in-house  sales  and  marketing
 organization.

 Our sales and  marketing costs  have decreased from  3% to  2% of  revenues,
 respectively, for the  fiscal year ended  October 31, 2005  compared to  the
 prior fiscal  year.   The reduction  in  our sales  and marketing  costs  is
 primarily due to  a reduction  in our  sales personnel.  During fiscal  year
 2005, we  have focused  our attention  on  increasing revenues  through  the
 efforts of our agents, and the  marketing initiatives previously noted.   We
 will  continue  to  focus  our sales  and  marketing efforts  on  web portal
 and magazine  advertising,  the  establishment  of  distribution networks to
 facilitate the introduction  and growth of  new products  and services,  and
 agent related expenses to generate additional revenues.

 General and Administrative Expenses

 Our general and administrative  expenses have increased  to 33% of  revenues
 for the fiscal  year ended  October 31,  2005 from  22% for  the prior  year
 period.  For the fiscal  year ended October 31,  2005, our bad debt  expense
 was $365,289. This includes approximately $291,000 from our prepaid  calling
 card distributor in  Iraq.   As a  result of  nonpayment, we  are no  longer
 providing services out of Iraq and  we are pursuing legal action to  collect
 this receivable.  During fiscal year 2005, we issued, to a provider of legal
 and investment-consulting services, warrants to acquire 1,000,000 shares  of
 common stock.   In connection with  this issuance of  warrants, we  recorded
 $159,695, the  fair value  of the  warrants, to  general and  administrative
 expense.   Although general and  administrative expenses as a percentage  of
 revenues has increased  for fiscal year  2005 compared to  the prior  fiscal
 year,  in absolute dollars,  general  and  administrative expenses, adjusted
 for  the  bad  debt  expense and warrant  expenses, have decreased by 5% for
 fiscal year  2005  compared  to fiscal year 2004.  This  reduction  has been
 accomplished primarily through  the elimination of  personnel and  personnel
 related  costs.  However,  due to  the overall  decline in  revenue and  the
 primarily fixed nature  of  our general  and administrative  expenses, as  a
 percentage of revenue, these  expenses have increased  for fiscal year  2005
 compared to the prior fiscal year.  We review our general and administrative
 expenses regularly and continue to manage  the costs accordingly to  support
 our current and anticipated future business, however it will be difficult to
 achieve significant reductions in future periods due to the fixed nature  of
 our general and administrative expenses.

 Gain on Settlement of Liabilities/Legal Settlement

 During the second quarter of fiscal  year 2003, we vacated our office  space
 in Atlanta, Georgia.  At that time, we began negotiations with the  landlord
 to terminate our lease agreement.  In October 2004, we reached an  agreement
 with the landlord to  pay $100,000 in settlement  of all outstanding  rents,
 payable in monthly installments of $5,000 through May 2006.  As a result, we
 recorded $241,000 as  "Gain on settlement  of liabilities/legal  settlement"
 during the fourth quarter of fiscal  year 2004, representing the  difference
 between our accrued rent and the settlement amount.

 In connection  with  the  acquisition  of the  assets  and  certain  of  the
 liabilities of Rapid Link, Incorporated ("RLI") during the fiscal year ended
 October 31, 2001, we recorded certain liabilities of $255,000, and continued
 to hold those liabilities pending a  final settlement with the RLI  trustee.
 During the fiscal year ended October 31,  2004, we agreed to pay $30,000  to
 the trustee, and recorded the remaining  $225,000 to "Gain on settlement  of
 liabilities/legal settlement."

 On July 20, 2004,  we filed a  suit against Q  Comm International, Inc.  ("Q
 Comm") in Federal Court in the Central  District of Utah.  Our suit  claimed
 damages of $4  million plus  attorney's fees  and costs  resulting from  the
 breach of a purchase agreement on the part of Q Comm relating to the sale of
 our  internally  developed  equipment  for  the  prepaid  telecommunications
 industry.  During the fourth quarter of fiscal year 2005, we entered into  a
 Settlement and Release Agreement with Q Comm.  The Agreement releases Q Comm
 from any and all claims  in connection with our  lawsuit against Q Comm  for
 breach of a purchase agreement.  In connection with the release,  we  agreed
 to a cash  settlement of $225,000,  which was received  on August 10,  2005.
 This amount  was  recorded  as  "Gain  on  settlement  of  liabilities/legal
 settlement" during the fiscal year ended October 31, 2005.

 Depreciation and Amortization

 Depreciation and  amortization has  decreased as  a  larger portion  of  our
 assets  still  in use  have  become  fully depreciated, including a majority
 of the  assets  acquired  from  RLI.  A majority  of  our  depreciation  and
 amortization expense relates to the equipment utilized in our VoIP network.

 Interest Expense and Financing Costs

 Interest expense and financing costs for the fiscal years ended October  31,
 2005 and  2004  included  interest expense  of  approximately  $344,000  and
 $432,000, respectively, on our convertible  debentures and notes payable  to
 related  parties.  In  addition,  for  fiscal year  2005,  interest  expense
 includes approximately $523,000 of  amortization of deferred financing  fees
 and debt discount on our debts to GCA, Global and related parties,  compared
 to $177,000 for the prior year period.  The increase in interest expense and
 financing costs for fiscal  year 2005 as compared  to the prior fiscal  year
 primarily relates to the extension of the maturity dates of our  convertible
 debt instruments with  both our third  party and related  party lenders.   A
 further explanation  of these  changes can  be found  in the  Liquidity  and
 Capital Resources section.

 Income (loss) from discontinued operations

 Income (loss) from discontinued operations for fiscal year ended October 31,
 2004 relates to  an increase  in our estimated  sales tax  liability to  the
 State of Texas  of $750,000, offset  by the write-off  of the remaining  net
 liability of  our German  subsidiary,  Rapid Link  Telecommunications  GMBH,
 totaling $2,251,000.

 In the fourth  quarter of fiscal  year 2003,  Rapid Link  Telecommunications
 GMBH filed for insolvency.  The  net liability associated with the  disposal
 of the  assets and  liabilities of  Rapid  Link Telecommunications  GMBH  of
 approximately $2.3 million was included in the balance sheet at October  31,
 2003 and  classified as  discontinued operations.   During  the fiscal  year
 2004, we determined  that we  no longer  controlled the  operations of  this
 subsidiary and that  the parent entity  had no legal  obligation to pay  the
 liabilities of Rapid  Link Telecommunications GMBH.   Accordingly, we  wrote
 off the  remaining net  liability of  $2,251,000 and  included the  gain  in
 discontinued operations during the fiscal year ended October 31, 2004.

 During the first quarter of fiscal  year 2004, we determined based on  final
 written communications with the State of Texas that the liability for  sales
 taxes (including  penalties and  interest) totaled  $1.1  million.   We  had
 previously accrued an estimated settlement amount of $350,000.  Accordingly,
 we accrued an additional $750,000.   On August 5,  2005, the State of  Texas
 filed  a lawsuit in  the  53rd Judicial  District  Court of  Travis  County,
 Austin,  Texas  against  the  Company.   The  lawsuit  requests  payment  of
 approximately $1,162,000  including  penalties  and  interest  for state and
 local  sales  taxes.  During  the  2005  fiscal  year,  we have  accrued the
 additional  $62,000.  The  sales  tax  amount  due  is attributable to audit
 findings of Canmax Retail Systems, a current subsidiary  of ours, and former
 operating  subsidiary  providing  retail  automation  software  and  related
 services  to the retail petroleum and convenience store industries, from the
 State of Texas for the years 1995 to 1999.  These operations were previously
 classified as discontinued after  we  sold our  retail  automation  software
 business  and  changed  our  business model  to the sale  of prepaid calling
 cards.  The State of Texas determined that we did  not properly  remit sales
 tax  on  certain  transactions.  Management believes that the amount due has
 been improperly assessed and will  continue  to  pursue  a lesser settlement
 amount, though we cannot assure you that this matter will be resolved in our
 favor.

 Liquidity and Sources of Capital

 To date we have  been generally unable  to achieve positive  cash flow on  a
 quarterly basis primarily due to the fact that our present lines of business
 do not generate a volume of business sufficient to cover our overhead costs.
 Our audit report  includes an explanatory  paragraph indicating  substantial
 doubt about our ability to continue as a going concern.

 We frequently are not  able to make timely  payment to our trade  creditors.
 As of our fiscal  year ended October 31,  2005, approximately $3.1  million,
 representing approximately 71%  of our  trade accounts  payable and  accrued
 liabilities,  were  past  due.  A majority of  the amounts past  due are  to
 foreign  vendors  that   have  supplied   us  with   low  margin   wholesale
 opportunities  and  we   are  no   longer  sending   significant,  or   any,
 telecommunications traffic to them.  We  will continue to work with them  to
 arrange for a reduction in the amount owed to them through either formal  or
 informal payment  plans.  We  continue to  seek sources  of working  capital
 sufficient to fund delinquent balances and meet ongoing obligations,  though
 our success on that front has been limited.

 Our future operating success is dependent on our ability to quickly generate
 positive cash flow from our VoIP lines of products and services.  Our  major
 growth areas  are anticipated  to include  the establishment  of  additional
 wholesale points of termination to offer  our existing wholesale and  retail
 customers,  and  the  introduction  of  new  retail VoIP products, primarily
 our new  Rapid  Link  products  both domestically  and  internationally.  We
 anticipate a cash shortfall from operations of approximately $500,000 during
 the next twelve months.   We do not  have any capital equipment  commitments
 during the next twelve months.  We anticipate funding this shortfall through
 available  cash  on  hand,  further  reduction  of  our  overhead  expenses,
 including personnel,  and  consolidation  of  operations  as  necessary.  In
 addition, we are actively pursuing debt or equity financing opportunities to
 continue our business.  Any failure of our business plan, including the risk
 and timing involved in rolling out retail products to end users, to generate
 positive cash flow could result in a significant cash flow crisis and  could
 force us  to seek  alternative  sources of  financing  as discussed,  or  to
 greatly reduce or discontinue operations. Although various possibilities for
 obtaining financing or effecting a business combination have been  discussed
 from time to time, there are no agreements with any party to raise money  or
 for us to combine with another entity and we cannot assure you that we  will
 be successful  in our  search  for investors  or  lenders.   Any  additional
 financing we may obtain  will involve material  and substantial dilution  to
 existing stockholders.   In  such event,  the  percentage ownership  of  our
 current  stockholders  will  be  materially  reduced,  and  any  new  equity
 securities sold by us may have  rights, preferences or privileges senior  to
 our current common  stockholders.   If we  are unable  to obtain  additional
 financing, our operations in the short term will be materially affected  and
 we may  not  be able  to  remain in  business.   These  circumstances  raise
 substantial doubt as to the  ability of our Company  to continue as a  going
 concern.

 At October  31,  2005, we  had  cash and  cash  equivalents of  $172,000,  a
 decrease  of  $409,000  from  the  balance  at  October  31,  2004.  We  had
 significant working capital deficits  at both October 31,  2005 and 2004  of
 $49,200,000 and $46,600,000, respectively

 Net cash used in operating activities of continuing operations was  $305,000
 for the fiscal year ended October 31, 2005, compared to net cash provided by
 operating activities of  continuing operations  of $260,000  for the  fiscal
 year ended October 31, 2004.  The  net cash used in operating activities  of
 continuing operations  for  the  fiscal year  ended  October  31,  2005  was
 primarily due  to  a  net loss  from  continuing  operations  of  $2,503,000
 adjusted for:  non-cash  interest  expense  of  $526,000;  depreciation  and
 amortization of $557,000; common stock and  warrants issued for services  of
 $206,000; bad  debt expense  of $365,000;  changes in  operating assets  and
 liabilities of $548,000; offset by gain  on sale of fixed assets of  $9,000.
 For the  fiscal  year ended  October  31, 2004,  the  net cash  provided  by
 operating activities of continuing operations of $261,000 was primarily  due
 to a  net loss  from continuing  operations of  $794,000; non-cash  interest
 expense of $182,000; depreciation and amortization of $616,000; net  changes
 in operating assets  and liabilities  of $693,000  and bad  debt expense  of
 $30,000; offset by gain on settlement of liabilities of $466,000.

 Net cash  used in  investing activities  of  continuing operations  for  the
 fiscal year ended October 31, 2005  was $32,000, consisting of property  and
 equipment purchases  of  $27,000;  $15,000  cash  paid  for  the  Integrated
 acquisition; offset by $10,000 proceeds from  the sale of fixed assets.  Net
 cash used in investing  activities of continuing  operations for the  fiscal
 year  ended  October  31,  2004  was  $145,000  of  property  and  equipment
 purchases.

 Net cash  used in  financing activities  of  continuing operations  for  the
 fiscal year ended October  31, 2005, totaled $72,000,  compared to net  cash
 used in financing  activities of continuing  operations of  $34,000 for  the
 fiscal year ended October 31, 2004.   For the fiscal year ended October  31,
 2005, net cash used in financing activities of continuing operations was due
 to repayments on our  convertible debt.  For  the fiscal year ended  October
 31, 2004, net cash used in financing activities of continuing operations was
 due to payments on capital leases.

 We have an accumulated  deficit of approximately $49  million as of  October
 31, 2005 as well as a significant  working capital deficit.  Funding of  our
 working capital deficit, current and future operating losses, and  expansion
 will require continuing capital investment which may not be available to us.
 Since the beginning of April 2001, we have raised in excess of $5.76 million
 in debt financing.

 Although to date we have been able to arrange the debt facilities and equity
 financing described below, there can be no assurance that sufficient debt or
 equity financing will continue to be available in the future or that it will
 be available on terms  acceptable to us.   As of October  31, 2005, we  have
 approximately $500,000 of  convertible debentures which  will mature  within
 the next year as well as a significant amount of trade payables and  accrued
 liabilities, which  are past  due.  We  will  continue to  explore  external
 financing opportunities and  renegotiation of our  short-term debt with  our
 current financing  partners in  order  to extend the terms  or  retire these
 obligations.  Our management is committed to the  success of our Company  as
 is evidenced by the level of financing it has made available to our Company.
 Failure to obtain  sufficient capital will  materially affect our  Company's
 operations and  financial condition.   As  a  result of  the  aforementioned
 factors and  related uncertainties,  there is  significant doubt  about  our
 Company's ability to continue as a going concern.

 Our current capital expenditure requirements are not significant,  primarily
 due to the equipment  acquired from RLI.   Our capital expenditures for  the
 fiscal year ended  October 31, 2005  were $27,000 and  we do not  anticipate
 significant spending for fiscal year 2006.

 In October 2001, we executed 10% convertible notes (the "Notes") with two of
 our executives  and one  director (the  "Related Parties"),  which  provided
 financing  of $1,945,958.  With  an original  maturity date  of October  24,
 2003, these Notes were amended subsequent  to fiscal year 2002 to mature  on
 February 24, 2004.   These Notes are secured by selected Company assets  and
 are convertible into our  common stock at  the option of  the holder at  any
 time.  The conversion price is equal to the closing bid price of our  common
 stock on the last trading day immediately preceding the conversion.  We also
 issued to  the holders  of the  Notes warrants  to acquire  an aggregate  of
 1,945,958 shares of common  stock at an exercise  price of $0.78 per  share,
 which expire on October 24, 2006.  For  the year ended October 31, 2002,  an
 additional $402,433  was  added  to the  Notes  and  an  additional  402,433
 warrants to acquire  our common  stock were  issued in  connection with  the
 financing.  During fiscal  year 2005  and  2004,  the holders  of the  Notes
 elected to convert $467,500  and $877,500, respectively,  of the Notes  into
 3,740,000 and  6,750,000, respectively,  of our  common stock.  On July  21,
 2005, our Company and the Related Parties agreed to extend the maturity date
 of the Notes  to February  29, 2008. In  connection with  the extension,  we
 issued to the Related Parties warrants  to acquire 640,000 shares of  common
 stock at an exercise price of $0.16.  The warrants expire in July 2010.  The
 outstanding balance of these Notes at October 31, 2005 was $1,003,390.

 In January 2002,  we executed a  6% convertible debenture  ("GCA-Debenture")
 with GCA Strategic Investment Fund Limited ("GCA"), which provided financing
 of $550,000 and had an original maturity date of January 28, 2003.  We  also
 issued to GCA warrants  to acquire an aggregate  of 50,000 shares of  common
 stock at an exercise price of $0.41  per share, which expire on January  28,
 2007.  The GCA-Debenture was amended  in January 2003 to mature on  November
 8, 2004.  In  connection  with  this January  2003  amendment  of  the  GCA-
 Debenture, we adjusted the exercise price of the previously issued  warrants
 to $0.21 per share and also issued  to the holder of the Debenture  warrants
 to acquire an  aggregate of 100,000  shares of common  stock at an  exercise
 price of  $0.21 per  share, which  expire on  February 8,  2008.   The  GCA-
 Debenture was amended  again in  June 2005 to  extend the  maturity date  to
 November 26, 2005.  In connection with this June 2005 amendment of the  GCA-
 Debenture, we  also  issued to  GCA  100,000  shares of  our  common  stock,
 warrants to purchase 150,000 shares of our common stock at an exercise price
 of $0.38 per  share and warrants  to purchase 110,000  shares of our  common
 stock at an exercise price of $0.11 per share, all of which warrants  expire
 on June 1, 2010.  The conversion price of the GCA-Debenture is equal to  the
 lesser of (i) 100% of the volume weighted average of sales price as reported
 by the  Bloomberg  L.P.  of  the  common  stock  on  the  last  trading  day
 immediately preceding the  Closing Date,  June 1, 2005   ("Fixed  Conversion
 Price") and (ii)  85% of  the  average of the three  lowest volume  weighted
 average sales prices  as reported by  Bloomberg L.P. during  the 20  trading
 days immediately preceding but not including the date of the related  notice
 of conversion (the "Formula Conversion Price").  In an event of default  the
 amount declared due and payable on the GCA-Debenture shall be  automatically
 converted into shares of our common  stock at the Formula Conversion  Price.
 During fiscal year 2004, GCA converted $10,000 of the GCA-Debenture and $730
 of accrued  interest  into  approximately 82,000  shares  of  common  stock.
 During fiscal  year 2005,  GCA converted  $35,000 of  the GCA-Debenture  and
 $7,657 of accrued interest into approximately  352,000 shares of our  common
 stock.  The outstanding balance on the GCA-Debenture is $455,000 at  October
 31, 2005. We are  in negotiations to  extend the maturity  date of the  GCA-
 Debenture.  In addition, we are currently seeking a debt facility or  equity
 financing that  will  allow  us  to  either  convert  our  outstanding  debt
 obligations with GCA and  Global into the new  financing, and/or pay down  a
 portion or all  of the  amounts now due.   There  can be  no assurance  that
 sufficient debt or equity financing will be available or available on  terms
 acceptable to us.  The debenture continues to accrue interest at the  stated
 rate.  Furthermore, the debenture  includes certain default provisions  that
 can be  enforced  by GCA  as  a result  of  nonpayment.   The  debenture  is
 classified as a  current liability on  our balance sheet  as of October  31,
 2005.

 In November 2002, we executed a 12% note payable (the "GC-Note") with Global
 Capital  Funding  Group,  L.P.,  ("Global")  which  provided  financing   of
 $1,250,000.  The GC-Note  matured on November  8, 2004.   We also issued  to
 Global warrants to acquire an aggregate of 500,000 shares of common stock at
 an exercise price of $0.14 per share, which expire on November 8, 2007.   In
 June 2005, the  GC-Note was replaced  by a  convertible note  ("GC-Conote").
 The GC-Conote matures on February 29, 2008, and the annual interest rate due
 on this convertible note is 10.08%.  The conversion price is equal to 80% of
 the average of  the three  lowest volume  weighted average  sales prices  as
 reported by Bloomberg L.P. during the 20 trading days immediately  preceding
 the date of the  related notice of  conversion.  In  addition, we issued  to
 Global 100,000  shares of  our common  stock, warrants  to purchase  500,000
 shares of our  common stock  at an  exercise price  of $0.38  per share  and
 warrants to purchase 125,000 shares of our common stock at an exercise price
 of $0.11  per share,  all of  which warrants  expire on  June 1,  2010.   In
 addition, interest of approximately $350,000 due on the GC-Note at the  time
 of replacement by the GC-Conote was  converted into a $400,000  non-interest
 bearing note  payable ("GC-Note2"),  which matures  on March  30, 2007.  The
 approximate $50,000 difference between the accrued  interest at the time  of
 replacement and  the  value  of  this new  note  was  recorded  as  deferred
 financing fees, and  is being  amortized over  the life  of the  GC-Conote2.
 During the year ended October 31, 2005, Global converted $75,000 of the  GC-
 Conote2 into approximately 656,000  shares of our common  stock. We did  not
 make the payment due on the GC-Conote2  on September 30, 2005.  The  GC-Note
 includes certain default  provisions that  can be  enforced by  Global as  a
 result of nonpayment.   We are in  negotiations with Global  to allow us  to
 extend the due date of this payment.   This amount is included as a  current
 liability on our balance sheet as of October 31, 2005.

 In July 2003, we executed a 10% note payable ("GCA-Note") with GCA Strategic
 Investment Fund Limited ("GCA"), which provided financing of $550,000.   The
 GCA-Note's maturity  date was  December 23,  2003.   We also  issued to  GCA
 warrants to acquire  an aggregate of  100,000 shares of  common stock at  an
 exercise price of $0.14 per share, which expire  on July 24, 2008.  Per  the
 terms of the GCA-Note agreement, in the event the GCA-Note is not repaid  in
 full within ten days of the maturity  date, the terms of the GCA-Note  shall
 become the same as those of  the GCA-Debenture.  Effective January 2,  2004,
 the GCA-Note was replaced by a convertible debenture with the same terms  as
 those of the GCA-Debenture, which had  a maturity date of November 8,  2004.
 The principal balance of the GCA-Note  was $574,597, which included  $24,597
 of interest due on the GCA-Note at the time it was replaced by a convertible
 debenture.  The  GCA-Note was amended  in June 2005  to extend the  maturity
 date to  November 26,  2006.   In connection  with this  amendment, we  also
 issued to GCA 40,000  shares of our common  stock, and warrants to  purchase
 150,000 shares of our common stock at an exercise price of $0.38 per  share,
 which warrants expire on June 1, 2010.  The outstanding balance on the  GCA-
 Note is $552,457 at October 31, 2005.


                              Payments Due By Period

                           Less than                       More than
                             1 year   1-3 years  3-5 years  5 years    Total
                           ---------  ---------- ---------  -------  ----------
 Contractual Obligations:
 Long-term debt           $  705,000  $2,831,000  $    -    $    -   $3,536,000
 Capital leases              126,000           -       -         -      126,000
 Operating leases            169,000      55,000       -         -      224,000
                           ---------   ---------   -----     -----    ---------
 Total                    $1,000,000  $2,886,000  $    -    $    -   $3,886,000
                           =========   =========   =====     =====    =========


 Item 7. Financial Statements.

 The information required by Item 7 of this Report is presented in Item 13.


 Item 8.  Changes in  and Disagreements  with Accountants  on Accounting  and
 Financial Disclosure.

 None.


 Item 8A. Controls and Procedures.

 As of the fiscal year ended October 31, 2005, we carried out an  evaluation,
 under the  supervision and  with the  participation of  our Chief  Executive
 Officer and our Chief Financial Officer, of the effectiveness of the  design
 and operation of  our disclosure controls  and procedures, as  such term  is
 defined under Rule 13a-15(e) promulgated  under the Securities Exchange  Act
 of 1934, as amended,  as of the end  of the period  covered by this  report.
 Based on  this  evaluation,  our  Chief  Executive  Officer  and  our  Chief
 Financial Officer concluded that our disclosure controls and procedures  are
 effective to ensure that information we are required to disclose in  reports
 that we  file or  submit  under the  Exchange  Act is  recorded,  processed,
 summarized, and reported within the time periods specified in SEC rules  and
 forms.

 There have  been  no changes,  significant  or otherwise,  in  our  internal
 controls over  financial reporting,  that occurred  during the  fiscal  year
 ended October 31, 2005 that has materially affected, or is reasonably likely
 to materially affect, our internal control over financial reporting.


 Item 8B. Other Information.

 None.


                                   PART III

 Item 9.  Directors,  Executive  Officers,  Promoters  and  Control  Persons;
 Compliance With Section 16(a) of the Exchange Act.

      The following  table  sets  forth  certain  information  regarding  our
 executive officers and directors.

      Name         Age           Position with the Company
      ----         ---           -------------------------
 John Jenkins      44    Chairman, Chief Executive Officer, and Director
 David Hess        44    President and Director
 Allen Sciarillo   41    Executive Vice President, Chief Financial Officer,
                         Secretary and Director
 Lawrence Vierra   60    Director
 Robert M. Fidler  67    Director

 JOHN JENKINS has  served as our  Chairman of the  Board and Chief  Executive
 Officer since October 2001, served as our President from December 1999 until
 July 2005, and has served  as a director since  December 1999.  Mr.  Jenkins
 has also served as the President of DTI Com, Inc., one of our  subsidiaries,
 since  November  1999.   In  May  1997,   Mr.  Jenkins  founded  Dial   Thru
 International Corporation  (subsequently dissolved  in November  2000),  and
 served as its  President and  Chief Executive  Officer until  joining us  in
 November 1999.  Prior to 1997, Mr. Jenkins served as the President and Chief
 Financial Officer for  Golden Line Technology,  a French  telecommunications
 company.  Prior  to entering  the telecommunications  industry,  Mr. Jenkins
 owned and operated several software,  technology and real estate  companies.
 Mr. Jenkins holds degrees in physics and business/economics.

 DAVID HESS was elected to our Board of Directors in May 2002 and has  served
 as our President since  July 2005.  Prior  to joining us,  Mr. Hess was  the
 Managing Partner of RKP  Steering Group, a company  he co-founded in  August
 2003.  From November 2001 until December 2002, Mr. Hess served as the  Chief
 Executive Officer  and  President,  North  America  of  Telia  International
 Carrier, Inc.  Prior  to joining Telia,  Mr. Hess was  part of a  turnaround
 team hired by the board of directors of Rapid Link, Incorporated.  He served
 as the Chief Executive Officer and as a director of Rapid Link, Incorporated
 from August  2000  until  September 2001.  On  March  13, 2001,  Rapid Link,
 Incorporated filed for  Chapter 11  bankruptcy protection.   Before  joining
 Rapid Link, Mr.  Hess served  as Chief  Executive Officer  of Long  Distance
 International from January  1999 until its  acquisition by  World Access  in
 February 2000.   Mr.  Hess  also served  as  President and  Chief  Operating
 Officer of TotalTel USA from May 1995 until January 1999.  Mr. Hess received
 a BA in Communications  with a Minor in  Marketing from Bowling Green  State
 University.

 ALLEN SCIARILLO  has  been  our  Chief  Financial  Officer,  Executive  Vice
 President and Secretary since July 2001 and was elected as a director in May
 2002.  From  January to March  2001, Mr. Sciarillo  was the Chief  Financial
 Officer  of  Star  Telecommunications,   Inc.,  a  global   facilities-based
 telecommunications carrier.   Prior to that  time, Mr.  Sciarillo served  as
 Chief Financial  Officer of  InterPacket Networks,  a provider  of  Internet
 connectivity to Internet service providers  worldwide, from July 1999  until
 its acquisition  by  American Tower  Corporation  in  December  2000.   From
 October  1997  to  June 1999,  he  served  as  Chief  Financial  Officer  of
 RSL  Com  USA,  a division  of  RSL  Com  Ltd.,  a  global  facilities-based
 telecommunications carrier.  Prior  to joining RSL,  Mr. Sciarillo was  Vice
 President and Controller of Hospitality  Worldwide Services, Inc. from  July
 1996 to October 1997.  Mr. Sciarillo began his career at Deloitte  &  Touche
 and is a  Certified Public  Accountant.  Mr.  Sciarillo received  a B.S.  in
 Accounting from California State University, Northridge.

 LAWRENCE VIERRA has served as one  of our directors since January 2000,  and
 from that time through October 2004, served as our Executive Vice President.
 Currently, Mr. Vierra is a professor at  the University of Las Vegas.   From
 1995 through 1999, Mr. Vierra served as the Executive Vice President of  RSL
 Com USA, Inc.,  an international  telecommunications company,  where he  was
 primarily responsible for international sales.   Mr. Vierra has also  served
 on  the   board   of  directors   and   executive  committees   of   various
 telecommunications companies and he  has extensive knowledge and  experience
 in the international sales and marketing of telecommunications products  and
 services. Mr. Vierra holds degrees in marketing and business administration.

 ROBERT M. FIDLER  has served as  one of our  directors since November  1994.
 Mr. Fidler joined Atlantic Richfield Company (ARCO) in 1960, was a member of
 ARCO's executive management team from 1976 to 1994 and was ARCO's manager of
 New Marketing Programs from 1985 until his retirement in 1994.

 Meetings of the Board of Directors

 Our Board  of Directors  held five  meetings during  the fiscal  year  ended
 October 31, 2005.  The  Board of Directors has  two standing committees:  an
 Audit  Committee  and  a  Compensation  Committee.   There  is  no  standing
 nominating committee.   Each of the  directors attended the  meeting of  the
 Board of Directors and all meetings of any committee on which such  director
 served.

 Audit Committee Financial Expert

 We currently do not have an  audit committee financial expert as defined  by
 Item 401(e)  of Regulation  S-B of  the Exchange  Act.   Our previous  audit
 committee financial expert resigned from our board of directors in September
 2004.  As our current  board of directors does  not have anyone eligible  to
 become our audit committee  financial expert and  be independent within  the
 meaning of Item 7(d)(3)(iv) of Schedule 14A of the above-mentioned act,  our
 board of  directors  is  currently  conducting a  search  for  a  new  audit
 committee financial expert.

 Audit Committee

 The Audit Committee is  comprised of two  non-employee directors, Robert  M.
 Fidler and Lawrence Vierra.  The  Audit  Committee makes recommendations  to
 our  Board  of  Directors or management  concerning the  engagement  of  our
 independent  public  accountants  and  matters  relating  to  our  financial
 statements, our accounting principles and our system of internal  accounting
 controls.  The Audit Committee also reports its recommendations to the Board
 of Directors as to  approval of financial statements.   The Audit  Committee
 held 4 meetings during the fiscal year ended October 31, 2005.

 Compliance with Section 16(a) of the Securities Exchange Act of 1934

 Section 16(a) of the Exchange Act requires our directors, executive officers
 and persons who own more than 10% of our  common stock to file with the  SEC
 initial reports of  ownership and  reports of  changes in  ownership of  our
 common  stock  and  other  equity  securities  of  our  Company.   Officers,
 directors and  greater than  10% stockholders  are required  by  regulations
 promulgated by  the SEC  to furnish  us  with copies  of all  Section  16(a)
 reports they file.  Based solely on the review of such reports furnished  to
 us and  written representations  that no  other  reports were  required,  we
 believe that during the  fiscal year ended October  31, 2005, our  executive
 officers, directors and  all persons  who own more  than 10%  of our  common
 stock complied with all Section 16(a) requirements.

 Code of Business Conduct and Ethics

 We have  adopted  a code  of  business  conduct and  ethics  for  employees,
 executive officers and directors that is designed to ensure that all of  our
 directors, executive officers  and employees meet  the highest standards  of
 ethical conduct.  The code requires  that our directors, executive  officers
 and employees avoid conflicts  of interest, comply with  all laws and  other
 legal requirements, and conduct business in an honest and ethical manner and
 otherwise act with integrity and in our  best interest.  Under the terms  of
 the code, directors, executive officers and employees are required to report
 any conduct that  they believe in  good faith to  be an  actual or  apparent
 violation of the code.

 As a mechanism to  encourage compliance with the  code, we have  established
 procedures to  receive,  retain  and  treat  complaints  received  regarding
 accounting,  internal  accounting  controls  or  auditing   matters.   These
 procedures  ensure   that   individuals  may   submit   concerns   regarding
 questionable accounting or auditing matters in a confidential  and anonymous
 manner.  The code also prohibits  us from retaliating against any  director,
 executive officer or employee who reports  actual or apparent violations  of
 the code.


 Item 10. Executive Compensation.

 The following  table  summarizes  the compensation  we  paid,  for  services
 rendered to our Company during the fiscal years ended October 31, 2005, 2004
 and 2003 to  our chief executive  officer and all  other executive  officers
 whose total annual  salary and bonus  exceeded $100,000  during fiscal  2005
 (the "Names Executive Officers").


                                                     Long Term Compensation
   Name and principal                                   Awards Securities
       position              Year   Salary    Bonus  Underlying Options/SARs
   -------------------       ----   -------   -----  -----------------------
                                      ($)      ($)             (#)

   John Jenkins              2005   150,000    -0-             -0-
   Chairman and Chief        2004   150,000    -0-           100,000
   Executive Officer         2003   150,000    -0-             -0-

   Allen Sciarillo           2005   135,000    -0-             -0-
   Executive Vice President  2004   130,000   1,106          100,000-
   and Chief Financial       2003   125,000    -0-             -0-
    Officer

<TABLE>

  Aggregated Option Exercises in Last Fiscal Year and Fiscal Year End Option
                                    Values

 The following table  sets forth information  with respect to  the number  of
 options held at  fiscal year  end and  the aggregate  value of  in-the-money
 options held at fiscal year end by each of the Named Executive Officers.


                  Shares                    Number of securities         Value of unexercised in-
                acquired on   Value    underlying unexercised options  the-money options at fiscal
                 exercise    realized      at fiscal year end (#)           year end ($) (2)
     Name          (#)       ($)(1)    Exercisable      Unexercisable  Exercisable    Unexercisable
 -------------- -----------  --------  -----------      -------------  -----------    -------------
 <S>               <C>         <C>       <C>              <C>              <C>             <C>
 John Jenkins      -0-         -0-       750,000           50,000           -0-             -0-
 Allen Sciarillo   -0-         -0-       550,000           50,000           -0-             -0-


 (1) The value  realized upon the  exercise of stock  options represents  the
 difference between  the exercise  price of  the stock  option and  the  fair
 market value of the shares, multiplied by the number of options exercised on
 the date of exercise.

 (2) The  value  of "in-the-money"  options  represents the  positive  spread
 between the exercise price of  the option and the  fair market value of  the
 underlying shares based on  the closing stock price  of our common stock  on
 October 31, 2005, which was $0.11 per share.  "In-the-money" options include
 only those options where the fair market  value of the stock is higher  than
 the exercise price of the option on  the date specified.  The actual  value,
 if any, an executive realizes on the exercise of options will depend on  the
 fair market value of our common stock at the time of exercise.
</TABLE>

 Compensation of Directors

 Directors are not  compensated for attending  Board and committee  meetings,
 though our  directors  participate in  our  Equity Incentive  Plan  and  are
 annually awarded  non-qualified  stock options  for  an aggregate  of  5,000
 shares of  our  common stock  for  services rendered  to  our Company  as  a
 director.

 Compensation Committee Interlocks and Insider Participation

 None of our executive officers or  directors serves as members of the  board
 of directors or compensation committee of any other entity, which has one or
 more executive officers serving as a member of our board of directors.   The
 Compensation Committee is comprised of two non-employee directors, Robert M.
 Fidler and Lawrence Vierra.


 Item 11. Security Ownership of Certain Beneficial Owners and Management and
 Related Stockholder Matters.

 The following table sets forth certain  information as of January 16,  2006,
 concerning those persons  known to us,  based on  information obtained  from
 such persons, our records  and schedules required to  be filed with the  SEC
 and delivered to us, with respect to the beneficial ownership of our  common
 stock by (i) each stockholder known  by us to own beneficially five  percent
 or more  of  such  outstanding  common  stock,  (ii)  each  of  our  current
 directors, (iii) each Named Executive Officer and (iv) all of our  executive
 officers and directors  as a group.   Except as  otherwise indicated  below,
 each of the  entities or  persons named  in the  table has  sole voting  and
 investment power with respect to all shares of our common stock beneficially
 owned.   Effect  has  been  given to  shares  reserved  for  issuance  under
 outstanding stock options and warrants where indicated.

                                                  Number of       Percent of
   Name and address of Beneficial Owner           Shares (1)      Class (2)
   ------------------------------------           ----------      ---------
   John Jenkins                                   18,566,118 (3)    61.77%
   17383 Sunset Boulevard, Suite 350
   Los Angeles, CA  90272

   Lawrence Vierra                                   431,580 (4)     4.13%
   8760 Castle Hill Avenue
   Las Vegas, NV  89129

   Robert M. Fidler
   987 Laguna Road                                    24,000 (5)        *
   Pasadena, CA  91105

   David Hess                                         10,000 (7)        *
   545 Alder Avenue
   Westfield, NJ  07090

   Allen Sciarillo                                 1,344,363 (6)     5.86%
   17383 Sunset Boulevard, Suite 350
   Los Angeles, CA  90272

   All Executive Officers and Directors as a      32,621,061        65.68%
   group (5 persons)

              * Reflects less than one percent.

       (1) Beneficial ownership  is  determined  in  accordance  with the
           rules  of  the  SEC.    In  computing  the  number  of  shares
           beneficially owned by a person and the percentage ownership of
           that person, shares of our common  stock subject to options or
           warrants held by  that person  that are exercisable  within 60
           days of January 16, 2006 are deemed outstanding.  Such shares,
           however, are not deemed outstanding  for purposes of computing
           the ownership of any other person.
       (2) Based upon 29,297,183 shares of common stock outstanding as of
           January 16, 2006.
       (3) Includes (i)  750,000  shares  of common  stock  which  may be
           acquired through  the  exercise  of  options,  (ii)  2,728,391
           shares of  common  stock  which may  be  acquired  through the
           exercise of warrants,  and (iii)  15,087,727 shares  of common
           stock which  may  be  acquired  through  the  conversion  of a
           convertible note (shares from  conversion calculated using the
           closing bid share price at January  16, 2006 of $0.12); all of
           which are exercisable or convertible within 60 days of January
           16, 2006.
       (4) Includes (i)  130,000  shares  of common  stock  which  may be
           acquired through  the exercise  of warrants  and  (ii) 299,080
           shares of  common  stock  which may  be  acquired  through the
           conversion of  a  convertible  note  (shares  from  conversion
           calculated using the  closing bid  share price at  January 16,
           2006 of $0.12);  all of  which are exercisable  or convertible
           within 60 days of January 16, 2006.
       (5) Includes 20,000 shares of common stock,  which may be acquired
           through the exercise of options   which are exercisable within
           60 days of January 16, 2006.
       (6) Includes (i)  550,000  shares  of common  stock  which  may be
           acquired through the exercise of  options, (ii) 130,000 shares
           of common stock which may be  acquired through the exercise of
           warrants, and (iii) 664,363  shares of common  stock which may
           be acquired  through  the  conversion  of  a  convertible note
           (shares from conversion calculated using the closing bid share
           price at  January  16,  2006  of  $0.12);  all  of  which  are
           exercisable or convertible within 60 days of January 16, 2006.
       (7) Includes 10,000 shares of common stock,  which may be acquired
           through the exercise  of options which  are exercisable within
           60 days of January 16, 2006.

 Equity Compensation Plan Information

 The following table provides information about shares of our common stock
 that may be issued under our equity compensation plans, as of October 31,
 2005:

                                                               Number of
                         Number of       Weighted-average      securities
                      securities to be    exercise price       remaining
                        issued upon       of outstanding     available for
                        exercise of          options,       future issuance
                        outstanding          warrants         under equity
                     options, warrants         and            compensation
 Plan Category           and rights           rights       plans (excluding
                        (column (a))                     securities reflected
                                                            in column (a))
 ----------------------------------------------------------------------------
 Equity                1,573,000 (1)          $0.36            3,655,000
 compensation
 plans approved by
 security holders
 ----------------------------------------------------------------------------
 Equity                    -0-                 n/a                 -0-
 compensation
 plans not
 approved by
 security holders
 ----------------------------------------------------------------------------
 Total                1,573,000               $0.36            3,655,000
 ----------------------------------------------------------------------------

 (1)  Amount includes outstanding options granted pursuant to the 2002 Dial
      Thru International Corporation Equity Incentive Plan and the Amended
      and Restated 1990 Dial Thru International Corporation Stock Option
      Plan.

 We adopted the 2002 Equity Incentive Plan ("Incentive Plan"), at our  annual
 shareholder meeting in May 2002 and subsequently amended at our October 2005
 annual  stockholder  meeting.  The Incentive  Plan authorizes  our Board  of
 Directors to grant up  to 4,000,000 options to  purchase our common  shares.
 The maximum number of shares of common stock which may be issuable under the
 Incentive Plan to any individual plan  participant is  500,000  shares.  All
 options granted  under the  Incentive  Plan have  vesting  periods up  to  a
 maximum of five years.   The exercise price of  an option granted under  the
 Incentive Plan shall not be less  than 85% of the  fair value of the  common
 stock on the date such option is granted.

 The  1990  Stock  Option  Plan  ("1990  Stock  Option  Plan"),  as  amended,
 authorizes our  Board of  Directors  to grant  up  to 2,300,000  options  to
 purchase common shares  of the Company.  No options will  be granted to  any
 individual director or employee,  which will, when  exercised, exceed 5%  of
 the issued and  outstanding shares of  the Company. The  term of any  option
 granted under the 1990 Stock Option Plan is fixed by the Board of  Directors
 at the time the options are  granted, provided that the exercise period  may
 not be longer  than 10 years  from the date  of grant.  All options  granted
 under the 1990 Stock Option Plan have up  to 10 year terms and have  vesting
 periods that range from 0 to three  years from the grant date. The  exercise
 price of any options granted  under the 1990 Stock  Option Plan is the  fair
 market value  at the  date of  grant.   Subsequent to  the adoption  of  the
 Incentive Plan, no  further options  will be  granted under  the 1990  Stock
 Option Plan.


 Item 12. Certain Relationships and Related Transactions.

 In October 2001, we issued 10% convertible notes (the "Notes") to two of our
 executive officers and one  director (the "Related  Parties"), each of  whom
 was also a director, who provided financing to our Company in the  aggregate
 principal amount of  $1,945,958.  The  Notes were issued  as follows: (i)  a
 note in  the principal  amount  of $1,745,958  to  John Jenkins,  our  Chief
 Executive Officer; (ii) a note in the principal amount of $100,000 to  Allen
 Sciarillo, our Executive  Vice President  and Chief  Financial Officer;  and
 (iii) a  note  in  the principal  amount  of  $100,000 to  Larry  Vierra,  a
 director.  With an original maturity  date of October 24, 2003, these  Notes
 were amended  to mature  on  February 24,  2004.  Each Note  was  originally
 convertible at six-month  intervals only,  but was  subsequently amended  in
 November 2002 to provide for conversion  into shares of our common stock  at
 the option of the holder at any time.  The conversion price is equal to  the
 closing bid price of  our common stock on  the last trading day  immediately
 preceding the  conversion.   We also  issued  to the  holders of  the  Notes
 warrants to acquire an aggregate of  1,945,958 shares of common stock at  an
 exercise price of  $0.75 per  share, which  warrants expire  on  October 24,
 2006. On July 21, 2005, our Company and the Related Parties agreed to extend
 the maturity date of the Notes to February 29, 2008. In connection with  the
 extension, we  issued to  the Related  Parties warrants  to acquire  640,000
 shares of common stock at an exercise  price of $0.16.  The warrants  expire
 in July 2010. The outstanding balance of these Notes at October 31, 2005 was
 $1,003,390.

 In January and July 2002,  the Notes issued to  Mr. Jenkins were amended  to
 include additional advances in the  aggregate principal amount of  $402,443.
 We also issued to Mr. Jenkins two warrants to acquire an additional  102,443
 and 300,000 shares of  common stock, respectively, at  an exercise price  of
 $0.75, which  warrants  expire  on  January  28,  2007  and  July  8,  2007,
 respectively.

 In September 2005 and 2004, respectively, the holders of the Notes converted
 a total aggregate of $467,500 and $877,500, respectively, of the outstanding
 principal into an  aggregate of  3,740,000 and  6,750,000, respectively,  of
 shares of common stock.


 Item 13. Exhibits.

      (1) and (2) list of financial statements

 The response to this item is submitted as a separate section of this Report.
 See the index on Page F-1.

      (3) exhibits

 The following is a  list of all exhibits  filed with this Report,  including
 those incorporated by reference.

 2.1   Agreement and Plan of Merger dated as of January 30, 1998, among
   Canmax Inc., CNMX MergerSub, Inc. and US Communications Services, Inc.
   (filed as Exhibit 2.1 to Form 8-K dated January 30, 1998 (the "USC 8-K"),
   and incorporated herein by reference)

 2.2   Rescission Agreement dated June 15, 1998 among Canmax Inc., USC and
   former principals of USC (filed as Exhibit 10.1 to Form 8-K dated January
   15, 1998 (the "USC Rescission 8-K"), and incorporated herein by
   reference)

 2.3   Asset Purchase Agreement by and among Affiliated Computed Services,
   Inc., Canmax and Canmax Retail Systems, Inc. dated September 3, 1998
   (filed as Exhibit 10.1 to the Company's Form 8-K dated December 7, 1998
   and incorporated herein by reference)

 2.4   Asset Purchase Agreement dated November 2, 1999 among ARDIS Telecom
   & Technologies, Inc., Dial Thru International Corporation, a Delaware
   corporation, Dial Thru International Corporation, a California
   corporation, and John Jenkins (filed as Exhibit 2.1 to the Company's
   Current Report on Form 8-K dated November 2, 1999 and incorporated herein
   by reference)

 2.5   Stock and Asset Purchase Agreement, dated as of September 18,
   2001, by and among Rapid Link USA, Inc., Rapid Link Inc., and Dial Thru
   International Corporation. (filed as Exhibit 2.1 to the Company's Form
   8-K dated October 29, 2001 and incorporated herein by reference)

 2.6   First Amendment to Stock and Asset Purchase Agreement, dated as of
   September 21, 2001, by and among Rapid Link USA, Inc., Rapid Link Inc.,
   and Dial Thru International Corporation. (filed as Exhibit 2.2 to the
   Company's Form 8-K dated October 29, 2001 and incorporated herein by
   reference)

 2.7   Second Amendment to Stock and Asset Purchase Agreement, dated as of
   October 12, 2001, by and among Rapid Link USA, Inc., Rapid Link Inc.,
   and Dial Thru International Corporation. (filed as Exhibit 2.3 to the
   Company's Form 8-K dated October 29, 2001 and incorporated herein by
   reference)

 2.8   Third Amendment to Stock and Asset Purchase Agreement, dated as of
   October 30, 2001, by and among Rapid Link USA, Inc., Rapid Link Inc.,
   and Dial Thru International Corporation. (filed as Exhibit 2.4 to the
   Company's Form 8-K dated December 28, 2001 and incorporated herein by
   reference)

 2.9   Fourth Amendment to Stock and Asset Purchase Agreement, dated as of
   November 30, 2001, by and among Rapid Link USA, Inc., Rapid Link Inc.,
   and Dial Thru International Corporation. (filed as Exhibit 2.5 to the
   Company's Form 8-K dated December 28, 2001 and incorporated herein by
   reference)

 2.10  Asset Purchase Agreement, dated as of October 25, 2005, by and between
   Integrated Communications, Inc. and Dial Thru International Corporation
   (filed as Exhibit 2.5 to the Company's Form 8-K dated October 31, 2005
   and incorporated herein by reference)

 3.1  Certificate of Incorporation, as amended (filed as Exhibit 3.1 to the
   Company's Annual Report on Form 10-K for the fiscal year ended October
   31, 1999 (the "1999 Form 10-K") and incorporated herein by reference)

 3.2   Amended and Restated Bylaws of Dial Thru International Corporation
   (filed as Exhibit 3.2 to the 1999 Form 10-K and incorporated herein by
   reference)

 3.3   Amendment to Certificate of Incorporation dated January 11, 2005 and
   filed with the State of Delaware on January 13, 2005 (filed as Exhibit
   3.3 to the 2004 Form 10-K and incorporated herein by reference)

 3.4*  Amendment to Certificate of Incorporation dated October 28, 2005 and
   filed with the State of Delaware on November 1, 2005

 4.1.1   Securities Purchase Agreement issued January 28, 2002 between Dial
   Thru International Corporation and GCA Strategic Investment Fund Limited
   (filed as Exhibit 4.1 to the Company's Form S-3, File 333-82622, filed on
   February 12, 2002 and incorporated herein by reference)

 4.2   Registration Rights Agreement dated January 28, 2002 between Dial
   Thru International Corporation and GCA Strategic Investment Fund Limited
   (filed as Exhibit 4.2 to the Company's Form S-3, File 333-82622, filed on
   February 12, 2002 and incorporated herein by reference)

 4.3   6% Convertible Debenture of Dial Thru International Corporation
   and GCA Strategic Investment Fund Limited (filed as Exhibit 4.3 to the
   Company's Form S-3, File 333-82622, filed on February 12, 2002 and
   incorporated herein by reference)

 4.4   Common Stock Purchase Warrant dated January 28, 2002 between GCA
   Strategic Investment Fund Limited and Dial Thru International Corporation
   (filed as Exhibit 4.4 to the Company's Form S-3, File 333-82622, filed on
   February 12, 2002 and incorporated herein by reference)

 4.5   Securities Purchase Agreement issued November 8, 2002 between Dial
   Thru International Corporation and Global Capital Funding Group, L.P.
   (filed as Exhibit 4.1 to the Company's Form 8-K filed on September 23,
   2003, and incorporated herein by reference)

 4.6   Secured Promissory Note issued November 8, 2002 between Dial Thru
   International Corporation and Global Capital Funding Group, L.P. (filed
   as Exhibit 4.2 to the Company's Form 8-K filed on September 23, 2003, and
   incorporated herein by reference)

 4.7   Common Stock Purchase Warrant issued November 8, 2002 between Dial
   Thru International Corporation and Global Capital Funding Group, L.P.
   (filed as Exhibit 4.3 to the Company's Form 8-K filed on September 23,
   2003, and incorporated herein by reference)

 4.8   Registration Rights Agreement issued November 8, 2002 between Dial
   Thru International Corporation and Global Capital Funding Group, L.P.
   (filed as Exhibit 4.4 to the Company's Form 8-K filed on September 23,
   2003, and incorporated herein by reference)

 4.9   Securities Purchase Agreement issued July 24, 2003 between Dial
   Thru International Corporation and GCA Strategic Investment Fund Limited
   (filed as Exhibit 4.5 to the Company's Form 8-K filed on September 23,
   2003, and incorporated herein by reference)

 4.10  Promissory Note issued July 24, 2003 between Dial Thru International
   Corporation and GCA Strategic Investment Fund Limited  (filed as Exhibit
   4.6 to the Company's Form 8-K filed on September 23, 2003, and
   incorporated herein by reference)

 4.11  Common Stock Purchase Warrant issued July 24, 2003 between Dial
   Thru International Corporation and GCA Strategic Investment Fund Limited
   (filed as Exhibit 4.6 to the Company's Form 8-K filed on September 23,
   2003, and incorporated herein by reference)

 4.12  Secured Promissory Note dated June 1, 2005 between Global Capital
   Funding Group, L.P. and Dial Thru International Corporation (filed as
   Exhibit 4.1 to the Company's Form 8-K filed on June 7, 2005, and
   incorporated herein by reference)

 4.13  Common Stock Purchase Warrant dated June 1, 2005 between Global
   Capital Funding Group, L.P. and Dial Thru International Corporation
   (filed as Exhibit 4.2 to the Company's Form 8-K filed on June 7, 2005,
   and incorporated herein by reference)

 4.14  Common Stock Purchase Warrant dated June 1, 2005 between Global
   Capital Funding Group, L.P. and Dial Thru International Corporation
   (filed as Exhibit 4.3 to the Company's Form 8-K filed on June 7, 2005,
   and incorporated herein by reference)

 4.15  Common Stock Purchase Warrant dated June 1, 2005 between GCA Strategic
   Investment Fund Limited and Dial Thru International Corporation (filed as
   Exhibit 4.5 to the Company's Form 8-K filed on June 7, 2005, and
   incorporated herein by reference

 4.16  Common Stock Purchase Warrant dated June 1, 2005 between GCA Strategic
   Investment Fund Limited and Dial Thru International Corporation (filed as
   Exhibit 4.6 to the Company's Form 8-K filed on June 7, 2005, and
   incorporated herein by reference

 4.17  Common Stock Purchase Warrant dated June 1, 2005 between GCA Strategic
   Investment Fund Limited and Dial Thru International Corporation (filed as
   Exhibit 4.7 to the Company's Form 8-K filed on June 7, 2005, and
   incorporated herein by reference

 10.1  Employment Agreement, dated June 30, 1997 between Canmax Retail
   Systems, Inc. and Roger Bryant (filed as Exhibit 10.3 to the Company's
   Registration Statement on Form S-3, File No. 333-33523 (the "Form S-3"),
   and incorporated herein by reference)

 10.2  Commercial Lease Agreement between Jackson--Shaw/Jetstar Drive Tri-star
   Limited Partnership and the Company (filed as Exhibit 10.20 to the
   Company's Annual Report on Form 10-K dated October 31, 1998, and
   incorporated herein by reference)

 10.3  Employment Agreement, dated November 2, 1999 between ARDIS Telecom
   & Technologies, Inc. and John Jenkins (filed as Exhibit 4.3 to the 2000
   Form 10-K and incorporated herein by reference)

 10.4  Amendment Number 1 to Securities Purchase Agreement dated June 1, 2005
   between Global Capital Funding Group, L.P. and Dial Thru International
   Corporation (filed as Exhibit 10.1 to the Company's Form 8-K filed on
   June 7, 2005, and incorporated herein by reference)

 10.5   Amendment Number 1 to Securities Purchase Agreement dated June 1, 2005
   between GCA Strategic Investment Fund Limited and Dial Thru International
   Corporation (filed as Exhibit 10.2 to the Company's Form 8-K filed on
   June 7, 2005, and incorporated herein by reference)

 10.6   Amendment Number 1 to Securities Purchase Agreement dated June 1, 2005
   between GCA Strategic Investment Fund Limited and Dial Thru International
   Corporation (filed as Exhibit 10.3 to the Company's Form 8-K filed on
   June 7, 2005, and incorporated herein by reference)

 14.1  Code of Business Conduct and Ethics for Employees, Executive Officers
 and Directors (filed as Exhibit 14.1 to the 2003 Form 10-K and incorporated
 herein by reference)

 21.1*  Subsidiaries of the Registrant

 23.1*  Consent of Independent Registered Public Accounting Firm

 31.1*  Certificate of Chief Executive Officer pursuant to Rule 13a-14(a) and
        Rule 15d-14(a) of the Securities Exchange Act of 1934

 31.2*  Certificate of Chief Financial Officer pursuant to Rule 13a-14(a) and
        Rule 15d-14(a) of the Securities Exchange Act of 1934

 32.1*  Certificate of Chief Executive Officer pursuant to 18 U.S.C. Section
        1350

 32.2*  Certificate of Chief Financial Officer pursuant to 18 U.S.C. Section
        1350

 * Filed herewith.


 Item 14. Principal Accounting Fees and Services.

 Audit Fees

 The aggregate  fees  billed  by KBA  Group  LLP  for  professional  services
 rendered for  the audit  of the  Company's annual  financial statements  and
 review of the interim financial statements  included in the Company's  Forms
 10-Qs and  10-QSBs, including  services related  thereto, were  $97,597  and
 $90,470 for the fiscal years ended October 31, 2005 and 2004, respectively.

 Audit-Related Fees

 There were no audit-related fees billed by KBA Group LLP during the fiscal
 years ended October 31, 2005 and 2004.

 Tax Fees

 The aggregate  fees  billed  by KBA  Group  LLP  for  professional  services
 rendered for tax compliance, tax advice and tax planning were $17,290 and $0
 for the fiscal  years ended October  31, 2005 and  2004, respectively.   The
 services comprising  the fees  reported as  "Tax Fees"  included tax  return
 preparation and consultation regarding various tax issues.

 All Other Fees

 There were no other fees billed by KBA Group LLP during the fiscal years
 ended October 31, 2005 and 2004.

                                  SIGNATURES

 In accordance with Section 13 or  15(d) of the Exchange Act, the  registrant
 caused this report to be signed on its behalf by the undersigned,  thereunto
 duly authorized.

 Date: January 30, 2006
                                         /s/ JOHN JENKINS
                                         John Jenkins,  Chairman of the Board
                                         and Chief Executive Officer



   RAPID LINK, INCORPORATED (FORMERLY DIAL THRU INTERNATIONAL CORPORATION)

 Date: January 30, 2006

 In accordance with the Exchange Act, this report has been signed below by
 the following persons on behalf of the registrant and in the capacities and
 on the dates indicated.


       NAME                        TITLE                         DATE
       ----                        -----                         ----

   /s/ JOHN JENKINS         Chairman, Chief Executive     January 30, 2006
   John Jenkins             Officer and President and
                            Director

   /s/ ALLEN SCIARILLO      Chief Financial Officer       January 30, 2006
   Allen Sciarillo          and secretary (principal
                            financial and principal
                            accounting officer)

   /s/ LAWRENCE VIERRA      Director                      January 30, 2006
   Lawrence Vierra

   /s/ ROBERT M. FIDLER     Director                      January 30, 2006
   Robert M. Fidler

   /s/ DAVID HESS           Director                      January 30, 2006
   David Hess

<PAGE>

                  RAPID LINK, INCORPORATED AND SUBSIDIARIES
                (FORMERLY DIAL THRU INTERNATIONAL COPORATION)

                        INDEX TO FINANCIAL STATEMENTS


           Consolidated Financial Statements

           Report of Independent Registered Public Accounting Firm      F-2

           Consolidated Balance Sheets at October 31, 2005 and 2004     F-3

           Consolidated Statements of Operations for the fiscal years
           ended October 31, 2005 and 2004                              F-4

           Consolidated Statement of Shareholders' Deficit for
           the fiscal years ended October 31, 2005 and 2004             F-5

           Consolidated Statements of Cash Flows for the fiscal years
           ended October 31, 2005 and 2004                              F-6

           Notes to Consolidated Financial Statements                   F-7

<PAGE>

           REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
           -------------------------------------------------------

 To the Board of Directors and Shareholders of
 Rapid Link, Incorporated

 We have audited the accompanying consolidated balance sheets of Rapid
 Link, Incorporated (formerly Dial Thru International Corporation), and
 subsidiaries as of October 31, 2005 and 2004, and the related consolidated
 statements of operations, shareholders' deficit and cash flows for the years
 then ended.  These consolidated financial statements are the responsibility
 of the Company's management.  Our responsibility is to express an opinion
 on these consolidated financial statements based on our audits.

 We conducted our audits in accordance with the standards of the Public
 Company Accounting Oversight Board (United States).  Those standards require
 that we plan and perform the audit to obtain reasonable assurance about
 whether the financial statements are free of material misstatement.  The
 Company is not required to have, nor were we engaged to perform, an audit
 of its internal control over financial reporting.  Our audits included
 consideration of internal control over financial reporting as a basis for
 designing audit procedures that are appropriate in the circumstances, but
 not for the purpose of expressing an opinion on the effectiveness of the
 Company's internal control over financial reporting.  Accordingly, we
 express no such opinion.  An audit includes examining, on a test basis,
 evidence supporting the amounts and disclosures in the financial statements.
 An audit also includes assessing the accounting principles used and
 significant estimates made by management, as well as evaluating the overall
 financial statement presentation.  We believe that our audits provide a
 reasonable basis for our opinion.

 In our opinion, the consolidated financial statements referred to above
 present fairly, in all material respects, the financial position of Rapid
 Link, Incorporated and subsidiaries as of October 31, 2005 and 2004, and the
 results of their operations and their cash flows for the years then ended,
 in conformity with accounting principles generally accepted in the United
 States of America.

 The accompanying consolidated financial statements have been prepared
 assuming that the Company will continue as a going concern.  As discussed
 in Note 1 to the consolidated financial statements, the Company has suffered
 recurring losses from continuing operations during each of the last two
 fiscal years.  Additionally, at October 31, 2005, the Company's current
 liabilities (which includes significant amounts of past due payables)
 exceeded its current assets by $7.0 million and the Company has a
 shareholders' deficit totaling $6.3 million.  These conditions raise
 substantial doubt about the Company's ability to continue as a going
 concern. Management's plans as they relate to these issues are also
 explained in Note 1.  The consolidated financial statements do not include
 any adjustments that might result from the outcome of this uncertainty.


 /s/ KBA GROUP LLP
 Dallas, Texas
 December 15, 2005
 (except Note 16 for which the date
 is January 30, 2006)


<PAGE>

                  RAPID LINK, INCORPORATED AND SUBSIDIARIES
                (FORMERLY DIAL THRU INTERNATIONAL CORPORATION)
                          CONSOLIDATED BALANCE SHEETS


                   ASSETS
                   ------                               October 31, October 31,
                                                           2005         2004
                                                        ----------   ----------

 CURRENT ASSETS
   Cash and cash equivalents                           $   172,164  $   586,389
   Trade accounts receivable, net of allowance
     for doubtful accounts of  $427,099 at October
     31, 2005 and $122,291 at October 31, 2004             564,039      841,127
   Prepaid expenses and other current assets               164,978      197,968
                                                        ----------   ----------
     Total current assets                                  901,181    1,625,484
                                                        ----------   ----------
 PROPERTY AND EQUIPMENT, net                               353,726      869,957
 GOODWILL, net                                           1,796,917    1,796,917
 OTHER ASSETS                                              219,043       69,050
                                                        ----------   ----------
 TOTAL ASSETS                                          $ 3,270,867  $ 4,361,408
                                                        ==========   ==========

    LIABILITIES AND SHAREHOLDERS' DEFICIT
    -------------------------------------

 CURRENT LIABILITIES
   Capital lease obligation                            $   126,196  $   126,196
   Trade accounts payable                                3,451,801    2,791,545
   Accrued liabilities                                     887,975    1,142,829
   Accrued interest (including $901,849 to related
     parties at October 31, 2005 and $759,692 at
     October 31, 2004)                                   1,007,322    1,154,284
   Deferred revenue                                        401,640      380,444
   Deposits and other payables                             418,109      428,109
   Note payable                                                  -    1,250,000
   Convertible debentures, current portion, net of
     debt discount of $223,167 at October 31, 2005
     and $0 at October 31, 2004                            481,833    1,040,000
   Convertible notes payable to related parties                  -    1,470,890
   Net current liabilities from discontinued operations  1,162,000    1,100,000
                                                        ----------   ----------
     Total current liabilities                           7,936,876   10,884,297
                                                        ----------   ----------

 CONVERTIBLE DEBENTURES, less current portion, net
   of debt discount of $1,140,824 at October 31, 2005      686,633            -
 CONVERTIBLE NOTES PAYABLE TO RELATED PARTIES, net
   of debt discount of $77,208 at October 31, 2005         926,182            -

 COMMITMENTS AND CONTINGENCIES

 SHAREHOLDERS' DEFICIT
   Preferred stock, $.001 par value; 10,000,000
     shares authorized; none issued and outstanding              -            -
   Common stock, $.001 par value; 175,000,000 shares
     authorized; 29,297,183 shares issued at October
     31, 2005 and 23,034,151 at October 31, 2004            29,298       23,034
   Additional paid-in capital                           42,858,862   40,055,719
   Accumulated deficit                                 (49,112,114) (46,546,772)
   Treasury stock, 12,022 common shares at cost            (54,870)     (54,870)
                                                        ----------   ----------
      Total shareholders' deficit                       (6,278,824)  (6,522,889)
                                                        ----------   ----------
 TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT           $ 3,270,867  $ 4,361,408
                                                        ==========   ==========


  The accompanying notes are an integral part of these consolidated financial
                                 statements.

                                     F-3

<PAGE>

                   RAPID LINK, INCORPORATED AND SUBSIDIARIES
                (FORMERLY DIAL THRU INTERNATIONAL CORPORATION)
                     CONSOLIDATED STATEMENTS OF OPERATIONS


                                                          Year Ended
                                                          October 31,
                                                 ----------------------------
                                                     2005            2004
                                                 ------------    ------------
 REVENUES                                       $   9,827,049   $  13,380,510

 COSTS AND EXPENSES
   Costs of revenues                                7,713,349      10,045,063
   Sales and marketing                                205,973         400,559
   General and administrative                       3,227,609       2,990,630
   Depreciation and amortization                      557,131         615,883
   Gain on sale of equipment                           (8,800)              -
   Gain on settlement of liabilities/legal
     settlement                                      (225,000)       (466,000)
                                                 ------------    ------------
     Total costs and expenses                      11,470,262      13,586,135
                                                 ------------    ------------

     Operating loss                                (1,643,213)       (205,625)

 OTHER INCOME (EXPENSE)
   Interest expense and financing costs              (651,253)       (396,899)
   Related party interest expense and
     financing costs                                 (219,362)       (216,612)
   Foreign currency exchange gains                     10,486          24,919
                                                 ------------    ------------
   Total other income (expense), net                 (860,129)       (588,592)
                                                 ------------    ------------
 LOSS FROM CONTINUING OPERATIONS                   (2,503,342)       (794,217)

 INCOME (LOSS) FROM DISCONTINUED OPERATIONS,
    net of income taxes of $0 for all periods         (62,000)      1,501,147
                                                 ------------    ------------
 NET INCOME (LOSS)                              $  (2,565,342)  $     706,930
                                                 ============    ============
 NET INCOME (LOSS) PER SHARE:
  Basic and diluted net income (loss) per share
    Continuing operations                       $       (0.11)  $       (0.05)
    Discontinued operations                             (0.00)           0.09
                                                 ------------    ------------
                                                $       (0.11)  $        0.04
                                                 ============    ============
 WEIGHTED AVERAGE SHARES USED IN THE CALCULATION
   OF PER SHARE AMOUNTS:
     Basic and diluted                             23,790,407      16,998,795
                                                 ============    ============


  The accompanying notes are an integral part of these consolidated financial
                                 statements.

                                     F-4

<PAGE>
<TABLE>

 RAPID LINK, INCORPORATED AND SUBSIDIARIES (FORMERLY DIAL THRU INTERNATIONAL CORPORATION)
                  CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT


                                           Common  Common Stock  Treasury     Additional       Accumulated
                                           Shares     Amount      Stock     Paid-in Capital      Deficit        Total
                                         ----------   --------   -------    ---------------   ------------    ----------
 <S>                                    <C>          <C>        <C>           <C>            <C>             <C>
 Balance at October 31, 2003             16,201,803  $  16,202  $(54,870)     $39,070,235    $(47,253,702)   $(8,222,135)
------------------------------------------------------------------------------------------------------------------------
 Issuance of common stock for
   convertible notes including interest      82,348         82         -           10,648               -         10,730
 Issuance of common stock for
   convertible notes - related party      6,750,000      6,750         -          870,750               -        877,500
 Beneficial conversion feature related
   to issuance of convertible debt                -          -         -          104,086               -        104,086

   Net income                                     -          -         -                -         706,930        706,930
                                         -------------------------------------------------------------------------------
 Balance at October 31, 2004             23,034,151     23,034   (54,870)      40,055,719     (46,546,772)    (6,522,889)
------------------------------------------------------------------------------------------------------------------------
 Issuance of common stock for
   convertible notes including interest   1,008,032      1,009         -          116,698               -        117,707
 Issuance of common stock for
   convertible notes - related party      3,740,000      3,740         -          463,760               -        467,500
 Beneficial conversion feature related
   to issuance of convertible debt                -          -         -        1,362,649               -      1,362,649
 Issuance of warrants in connection
   with amendments to convertible
   debentures                                     -          -         -          363,648               -        363,648
 Issuance of warrants in connection with
   amendments to convertible notes -
   related party                                  -          -         -           88,239               -         88,239
 Issuance of common stock in connection
   with amendments to notes payable         240,000        240         -           99,229               -         99,469
 Issuance of common stock for services      325,000        325         -           45,675               -         46,000
 Issuance of common stock for
   acquisition of customer base             950,000        950         -          103,550               -        104,500
 Issuance of warrants for services                -          -         -          159,695               -        159,695

   Net loss                                       -          -         -                -      (2,565,342)    (2,565,342)
                                         -------------------------------------------------------------------------------
 Balance at October 31, 2005             29,297,183  $  29,298  $(54,870)     $42,858,862    $(49,112,114)   $(6,278,824)
========================================================================================================================

 The accompanying notes are an integral part of this consolidated financial statement.


                                     F-5

</TABLE>
<PAGE>

                   RAPID LINK, INCORPORATED AND SUBSIDIARIES
                (FORMERLY DIAL THRU INTERNATIONAL CORPORATION)
                     CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                          Year Ended
                                                          October 31,
                                                 ----------------------------
                                                     2005            2004
                                                 ------------    ------------

 CASH FLOWS FROM OPERATING ACTIVITIES
   OF CONTINUING OPERATIONS
  Net loss from continuing operations           $  (2,503,342)  $    (794,217)
  Adjustments to reconcile net loss from
    continuing operations to net cash (used in)
    provided by operating activities:
    Gain from sale of fixed assets                     (8,800)              -
    Common stock and warrants issued
      for services                                    205,695               -
    Bad debt expense                                  365,289          30,000
    Non-cash interest expense                         526,158         181,525
    Gain on settlement of liabilities                       -        (466,000)
    Depreciation and amortization                     557,131         615,883
    (Increase) decrease in:
      Trade accounts receivable                       (88,201)          1,483
      Prepaid expenses and other current assets        32,990          33,029
      Other assets                                     (8,678)        (18,614)
    Increase (decrease) in:
      Trade accounts payable                          660,256          (8,473)
      Accrued liabilities                             (59,895)        664,892
      Deferred revenue                                 21,196          23,445
      Deposits and other payables                     (10,000)         (2,569)
                                                 ------------    ------------
  Net cash (used in) provided by operating
    activities of continuing operations              (310,201)        260,384
                                                 ------------    ------------
 CASH FLOWS FROM INVESTING ACTIVITIES
   OF CONTINUING OPERATIONS
  Purchase of property and equipment                  (26,884)       (144,854)
  Acquisition costs                                   (15,000)              -
  Proceeds from sale of fixed assets                   10,000               -
                                                 ------------    ------------
  Net cash used in investing activities
    of continuing operations                          (31,884)       (144,854)
                                                 ------------    ------------
 CASH FLOWS FROM FINANCING ACTIVITIES
   OF CONTINUING OPERATIONS
  Payment on convertible debenture                    (72,140)              -
  Payments on capital leases                                -         (34,397)
                                                 ------------    ------------
  Net cash used in financing activities
    of continuing operations                          (72,140)        (34,397)
                                                 ------------    ------------
 NET DECREASE (INCREASE) IN CASH AND
   CASH EQUIVALENTS                                  (414,225)         81,133

 Cash and cash equivalents at beginning of year       586,389         505,256
                                                 ------------    ------------
 Cash and cash equivalents at end of year       $     172,164   $     586,389
                                                 ============    ============

 SUPPLEMENTAL DISCLOSURE
   OF CASH FLOW INFORMATION
  Cash paid for interest                        $      79,803   $          -

 SUPPLEMENTAL DISCLOSURE OF NON CASH INVESTING
   AND FINANCING ACTIVITIES
  Issuance of common stock for convertible
    notes including interest                    $     117,707   $     10,730
  Issuance of common stock for convertible
    notes payabe - related party                $     467,500   $    877,500
  Issuance of common stock for acquisition
    of customer base                            $     104,500   $          -
  Beneficial conversion feature of convertible
    debentures recorded as debt discount        $   1,362,649   $    104,086
  Note payable exchanged for convertible
    debenture                                   $   1,250,000   $    550,000
  Convertible debenture issued for accrued
    interest                                    $     349,617   $          -
  Fair value of common stock issued
    in connection with amendments
    to note agreements                          $      99,469   $          -
  Fair value of warrants issued in
    connection with amendments to
    debt agreements                             $     451,887   $          -
  Convertible debenture issued
    for financing fees                          $      50,383   $          -


  The accompanying notes are an integral part of these consolidated financial
                                  statements.

                                     F-6


<PAGE>

                  RAPID LINK, INCORPORATED AND SUBSIDIARIES
                (FORMERLY DIAL THRU INTERNATIONAL CORPORATION)

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 NOTE 1 - ORGANIZATION AND NATURE OF BUSINESS

 Organization
 ------------
 Rapid Link Incorporated ("Rapid Link" or the "Company"), was incorporated on
 July 10, 1986  under the Company  Act of the  Province of British  Columbia,
 Canada.  On August 7, 1992,  the Company renounced its original province  of
 incorporation and elected  to continue its  domicile under the  laws of  the
 State of Wyoming, and on November 30,  1994, its name was changed to  Canmax
 Inc.  On February 1, 1999, this predecessor company reincorporated under the
 laws of  the State  of Delaware  and changed  its name  to ARDIS  Telecom  &
 Technologies, Inc.

 On November 2, 1999, the Company acquired substantially all of the  business
 and assets of Dial Thru International Corporation, a California corporation,
 along with the rights to the name "Dial Thru International Corporation."  On
 January 19,  2000,  the  Company  changed its  name  from  ARDIS  Telecom  &
 Technologies, Inc. to Dial Thru International  Corporation.  On November  1,
 2005,  the  Company   changed  its  name   to  "Rapid  Link   Incorporated".
 Historically, Rapid Link has served  as a facilities-based, global  Internet
 Protocol   ("IP")   communications   company   providing   connectivity   to
 international  markets  experiencing  significant  demand  for  IP   enabled
 services.  Rapid Link provides a variety of international telecommunications
 services targeted  to  small and  medium  sized enterprises  ("SME's")  that
 include  the  transmission  of  voice and data traffic and the  provision of
 Web-based  and  other  communications  services.  The  Company  also   sells
 telecommunications services for both the foreign and domestic termination of
 international long distance traffic into the  wholesale market.  Rapid  Link
 utilizes Voice over Internet  Protocol ("VoIP") packetized voice  technology
 (and other compression techniques) to improve both cost and efficiencies  of
 telecommunication   transmissions.   Rapid   Link   utilizes   international
 satellites and the Internet to transport the Company's communications.

 Beginning in the  fourth quarter  of fiscal  2004, the  Company shifted  its
 retail  product  focus  to   value-added  VoIP  communication  services   to
 customers, both  domestically  and  internationally, although  to  date  the
 Company has not derived significant revenues from this new  offering.  Rapid
 Link has  focused on  the US  military  and  other key  niche  markets.  The
 Company offers PC - to - PC, PC - to - phone, and phone-to-phone calling  on
 their unique set of  Internet Access Device's ("IAD's")  that provide a  new
 low cost phone  service that is  delivered through  a broadband  connection.
 Rapid Link offers VoIP service plans  to residential and business  customers
 in addition to serving the military.   The Company's flat rate service plans
 enable  the  users  to speak an unlimited time  to their party.  These plans
 include free features such as voice mail, call forwarding, three way calling
 and  many  more  as  a  part  of  the  service.  Rapid Link's VoIP IAD's for
 consumers and businesses consists  of  single and  two-line  routers,  which
 enables customers to convert their traditional phone into a VoIP phone, or a
 headset  that plugs directly into the customers  computer.  All the services
 connect through the Internet.  The customer can  then make and receive calls
 through their customized phone number using VoIP.

 Financial Condition
 -------------------
 The Company is subject to various risks in connection with the operation  of
 its  business  including,  among  other  things,  (i)  changes  in  external
 competitive market factors,  (ii) inability to  satisfy anticipated  working
 capital or other  cash requirements, (iii)  changes in  the availability  of
 transmission facilities, (iv) changes in the Company's business strategy  or
 an inability to  execute is  strategy due  to unanticipated  changes in  the
 market, (v) various competitive  factors that may  prevent the Company  from
 competing successfully in the  marketplace, and (vi)  the Company's lack  of
 liquidity and its ability to raise  additional capital.  The Company has  an
 accumulated deficit of approximately $49 million as of October 31, 2005,  as
 well as a working capital deficit of approximately $7 million. In  addition,
 approximately 71%  of  the  Company's trade  accounts  payable  and  accrued
 liabilities are past due.  Furthermore,  the Company  is  in  default on its
 convertible debenture due November 26, 2005 with  GCA Stragategic Investment
 Fund, and is in arrears on its quarterly principal payment  on  one  of  its
 convertible  debentures  with  Global Capital Funding Group, LP.  Funding of
 the  Company's working capital deficit, its current  and  future anticipated
 operating  losses,  and  expansion  of  the Company  will require continuing
 capital investment.  Historically,  some  of the funding  of the Company has
 been provided  by a major shareholder.  The Company's  strategy  is  to fund
 these  cash  requirements  through  debt  facilities  and  additional equity
 financing.

 Although the Company  has been able  to arrange debt  facilities and  equity
 financing to date, there can be no assurance that sufficient debt or  equity
 financing will continue to  be available in  the future or  that it will  be
 available on terms acceptable to the Company.  Failure to obtain  sufficient
 capital would materially affect the Company's  operations in the short  term
 and  expansion strategies.  The Company  will continue  to explore  external
 financing opportunities and  renegotiation of its  short-term debt with  its
 current financing  partners in  order  to extend the terms  or  retire these
 obligations.  Currently,  the Company is in negotiations with two parties to
 obtain additional  financing,  although  the  Company  has  not  received  a
 commitment from either party.  At October 31, 2005, approximately 28% of the
 debt is  due  to the  senior management  and  a  Director  of  the  Company.
 Management is  committed to  the growth  and success  of the  Company as  is
 evidenced by the level of financing they have made available to the Company.

 As a result of the aforementioned  factors and related uncertainties,  there
 is substantial doubt  about the  Company's ability  to continue  as a  going
 concern.   The  consolidated   financial  statements  do  not  include   any
 adjustments  to  reflect   the  possible  effects   of  recoverability   and
 classification of assets or classification of liabilities, which may  result
 from the inability of the Company to continue as a going concern.


 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 Principles of Consolidation
 ---------------------------
 The accompanying consolidated financial  statements include the accounts  of
 the Company  and its  wholly-owned subsidiaries,  Dial Thru,  Inc., a  Texas
 corporation,  DTI   Com,  Inc.,   a   Delaware  corporation,   Rapid   Link,
 Incorporated, South Africa, Canmax  Retail Systems, and  Rapid Link GmbH,  a
 Germany company, which was liquidated in 2004.  All significant intercompany
 accounts and transactions have been eliminated.

 Revenue Recognition
 -------------------

 Long distance revenue

 Revenues generated by international  re-origination, dial thru services  and
 international wholesale termination are based on minutes of customer  usage.
 The Company records payments received in  advance as deferred revenue  until
 such services are  provided. This policy  applies to  all international  re-
 origination and dial thru  services revenues, and  is currently the  primary
 source of the Company's revenue.

 VoIP service revenue

 The Company defers revenue  recognition of new  subscriber revenue from  its
 service offerings until the acceptance period has expired. New customers may
 terminate their service within thirty days of order placement and receive  a
 full refund of fees previously paid. The Company has been providing its  new
 VoIP services for a limited period  of time, has an insignificant  amount of
 revenue to  date, and  therefore, has  not developed  sufficient history  to
 apply a return rate and reserve against new order revenue.  Accordingly, the
 Company defers new  subscriber revenue for  thirty days  to ensure that  the
 thirty day trial period has expired.

 Emerging  Issues  Task  Force  consensus  No.  00-21  ("EITF  No.   00-21"),
 "Accounting for Revenue  Arrangements with  Multiple Deliverables"  requires
 that  revenue  arrangements  with  multiple  deliverables  be  divided  into
 separate units of  accounting if the  deliverables in  the arrangement  meet
 specific criteria. In addition, arrangement consideration must be  allocated
 among the separate units of accounting based on their relative fair  values,
 with certain limitations.  The VoIP service  with the accompanying  hardware
 that customers use to access the Internet constitutes a revenue  arrangement
 with multiple deliverables. In accordance with the guidance of EITF No.  00-
 21, the Company  allocates VoIP revenues,  including activation fees,  among
 the hardware and subscriber services. Revenues allocated to the hardware are
 recognized as  product  revenues at  the  end  of thirty  days  after  order
 placement, provided the customer  does not cancel  their service. All  other
 revenues are recognized as  service revenues when  the related services  are
 provided.

 Cash and Cash Equivalents
 -------------------------
 The Company  considers  all  highly liquid  investments  purchased  with  an
 original maturity of three months or less to be cash equivalents.  Cash  and
 cash equivalent are at risk to  the extent that they exceed Federal  Deposit
 Insurance Corporation insured amounts.  To  minimize this risk, the  Company
 places its  cash and  cash equivalents  with high  credit quality  financial
 institutions.

 Accounts Receivable
 -------------------
 Trade accounts receivable are  stated at the amount  the Company expects  to
 collect.   The  Company  maintains  allowances  for  doubtful  accounts  for
 estimated losses  resulting from  the inability  of  its customers  to  make
 required  payments.   Management  considers   the  following  factors   when
 determining the  collectibility  of  specific  customer  accounts:  customer
 credit-worthiness, past  transaction  history  with  the  customer,  current
 economic industry trends,  and changes in  customer payment terms.   If  the
 financial  condition  of  the  Company's  customers  were  to   deteriorate,
 adversely affecting their  ability to make  payments, additional  allowances
 would be required.  Based on  management's assessment, the Company  provides
 for estimated  uncollectible amounts  through a  charge  to earnings  and  a
 credit to  a valuation  allowance.   Interest is  typically not  charged  on
 overdue accounts receivable.  Balances  that  remain  outstanding after  the
 Company has used  reasonable collection efforts  are written  off through  a
 charge to the valuation allowance and a credit to accounts receivable.   The
 Company does not charge interest on overdue accounts receivable.

 Property and Equipment
 ----------------------
 Property and  equipment are  stated at  cost. Depreciation  of property  and
 equipment is calculated  using the straight-line  method over the  estimated
 useful lives of  the assets ranging  from three to  seven years.   Equipment
 held under  capital leases  and leasehold  improvements are  amortized on  a
 straight-line basis over  the shorter  of the  remaining lease  term or  the
 estimated useful life of the related asset ranging from three to five years.
 Expenditures for repairs and maintenance are charged to expense as incurred.
 Major renewals and betterments are capitalized.

 Goodwill
 --------
 Goodwill is reviewed for impairment annually.  Impairment indicators include
 (i)  a  significant  decrease  in  the  market value  of  an asset,  (ii)  a
 significant change in the extent or  manner in which an  asset is used or  a
 significant physical change in an asset,  (iii) a significant adverse change
 in legal factors or in the business  climate that could affect the value  of
 an asset  or  an adverse action  by a regulator,  and (iv)  a current period
 operating or cash  flow loss combined  with a history of operating  or  cash
 flow losses or a projection or forecast that demonstrates continuing  losses
 associated with an asset  used  for  the purpose of  producing revenue.  The
 Company  adopted SFAS No. 141, "Business Combinations" ("SFAS 141") and SFAS
 No. 142, "Goodwill  and  Other  Intangible Assets"  ("SFAS 142").  SFAS  141
 requires  that  the  purchase  method of accounting be used for all business
 combinations initiated after June 30, 2001,  and also specifies the criteria
 for  the  recognition  of intangible assets separately from goodwill.  Under
 SFAS 142, goodwill  is  no  longer amortized but is subject to an impairment
 test at least annually or more frequently if impairment indicators arise.

 The Company has one operating and reporting segment and one reporting  unit.
 For the purpose of identifying the reporting units, the Company followed the
 guidance in  paragraph  30  of SFAS  142,  (i)  an operating  segment  is  a
 reporting  unit  if  discrete   financial  information  is  available   (ii)
 management regularly reviews individual operating results, and (iii) similar
 economic characteristics of components within an operating segment result in
 a single reporting unit.  The Company's management regularly reviews one set
 of financial information, and  all of the  Company's products share  similar
 economic characteristics.  Therefore, the Company has determined that it has
 one single reporting unit.

 In accordance  with SFAS  142, an  annual impairment  test of  goodwill  was
 performed by an independent valuation firm in the fourth quarters of  fiscal
 years  2005  and  2004.   The  valuation  process  appraised  the  Company's
 enterprise value using a combination of market capitalization and  multiples
 of earnings valuation techniques.  The valuation process indicated  that the
 enterprise fair value exceeds the carrying value of the Company's net assets
 and liabilities.  Accordingly,  the Company concluded that no  impairment of
 goodwill existed.

 Long-Lived Assets
 -----------------
 Long-lived assets are reviewed for impairment whenever events or changes  in
 circumstances indicate that the carrying amount  of the assets might not  be
 recoverable.  The Company does not  perform a periodic assessment of  assets
 for impairment in the absence of such information or indicators.  Conditions
 that would necessitate an  impairment include a  significant decline in  the
 observable market value of an asset,  a significant change in the extent  or
 manner in which an asset is used, or a significant adverse change that would
 indicate that the  carrying amount of  an asset or  group of  assets is  not
 recoverable.   For  long-lived assets  to  be  held and  used,  the  Company
 recognizes an impairment  loss only  if an  impairment is  indicated by  its
 carrying value not being recoverable through  undiscounted cash flows.   The
 impairment loss is the difference between  the carrying amount and the  fair
 value of the asset estimated using discounted cash flows.  Long-lived assets
 held for sale are reported at the lower of cost or fair value less costs  to
 sell.

 Net Loss Per Share
 ------------------
 Basic net loss per  share is computed using  the weighted average number  of
 shares of common  stock outstanding during  the year. Diluted  net loss  per
 share is computed  using the  weighted average  number of  shares of  common
 stock outstanding during the year and common equivalent shares consisting of
 stock options,  warrants, and  convertible  debentures (using  the  treasury
 stock method) to the extent they are dilutive.

 The shares  issuable  upon  the exercise  of  stock  options,  warrants  and
 convertible debentures are  excluded from the  calculation of  net loss  per
 share for the years ended October 31, 2005  and  2004 as their effect  would
 be antidilutive.  At October 31, 2005 and  2004 , there were 54,388,861  and
 41,235,234 shares, respectively, potentially issuable from outstanding stock
 options, warrants and convertible debentures.

 Income Taxes
 ------------
 The  Company  utilizes  the  asset  and  liability  approach  to   financial
 accounting and  reporting  for income  taxes.   Deferred  income  taxes  and
 liabilities are  computed for  differences between  the financial  statement
 carrying amounts and tax basis of assets and liabilities that will result in
 taxable or deductible amounts  in the future based  on enacted tax laws  and
 rates applicable to  the periods in  which the differences  are expected  to
 affect taxable income.  Valuation allowances are recorded when necessary  to
 reduce deferred tax assets  to the amount expected  to be realized.   Income
 tax expense or benefit is the tax payable or refundable for the period  plus
 or  minus  the  change  during  the  period  in  deferred  tax  assets   and
 liabilities.

 Estimates and Assumptions
 -------------------------
 The preparation  of  financial  statements  in  conformity  with  accounting
 principles generally accepted  in the United  States requires management  to
 make estimates  and assumptions  that effect the  amounts  reported  in  the
 financial statements  and accompanying notes.  Actual  results could  differ
 from  those estimates.  The most significant estimates include the Company's
 assessment of goodwill impairment,  the Company's estimate of the fair value
 of equity instruments and allowance for doubtful accounts.

 Fair Market Value of Financial Instruments
 ------------------------------------------
 The carrying amount for current assets  and liabilities, and long-term  debt
 is not materially  different than  fair market  value because  of the  short
 maturity of the instruments and/or their respective interest rate amounts.

 Stock-Based Compensation
 ------------------------
 The Company accounts for  stock-based employee compensation arrangements  in
 accordance with provisions  of Accounting Principles  Board ("APB")  Opinion
 No. 25, "Accounting for  Stock Issued to Employees,"  and complies with  the
 disclosure  provisions  of  SFAS   No.  123,  "Accounting  for   Stock-Based
 Compensation," as  amended  by  SFAS No.  148  "Accounting  for  Stock-Based
 Compensation  -  Transition  and  Disclosure".   Under APB Opinion  No.  25,
 compensation expense for employees  is based on the  excess, if any, on  the
 date of grant, of fair value of the Company's stock over the exercise price.
 Accordingly, no compensation cost has been recognized for its employee stock
 options in the financial statements during the years ended October 31,  2005
 and 2004   as  the fair  market value  on the  grant date  approximates  the
 exercise price. Had the  Company determined compensation  cost based on  the
 fair value at the  grant date for  its stock options  under SFAS No.123,  as
 amended by SFAS No.  148, the Company's pro  forma net loss from  continuing
 operations for the years ended October 31, 2005 and 2004 would have been  as
 follows:
                                                      2005           2004
                                                  -----------     ----------
 Net loss from continuing operations, as         $ (2,503,342)   $  (794,217)
 reported

 Add: Stock-based employee compensation
 expense included in reported net loss
 from continuing operations                                 -              -

 Deduct: Stock-based employee compensation
 expense determined under the fair value
 based method                                         (13,293)      (142,922)
                                                  -----------     ----------
 Pro forma net loss from continuing operations   $ (2,516,635)   $  (937,139)
                                                  ===========     ==========

 Net loss per share from continuing
 operations - basic and dilutive, as reported    $      (0.11)   $     (0.05)
                                                  ===========     ==========

 Net loss per share from continuing
 operations - basic and dilutive, pro forma      $      (0.11)   $     (0.06)
                                                  ===========     ==========

 For purposes  of pro  forma disclosures,  the estimated  fair value  of  the
 options is amortized to expense over  the options' vesting periods.  Because
 options vest  over a  period  of several  years  and additional  awards  are
 generally made each year, the pro  forma information presented above is  not
 necessarily indicative of the effects on reported or pro forma net  earnings
 or losses for future years.

 The fair  value of  all options  and warrants  for shares  of the  Company's
 common stock issued to employees has been determined using the Black-Scholes
 option pricing model with the following assumptions:


                                            2004
       -------------------------------------------
       Risk-free interest rate               3%
       Expected dividend yield               0%
       Expected lives                      2 years
       Expected volatility                  100%

 There were no options issued to employees during the year ended October 31,
 2005.

 The Company  accounts  for equity instruments  issued  to  non-employees  in
 accordance  with  the provisions of SFAS No. 123  as amended by SFAS No. 148
 and Emerging Issues Task Force ("EITF") Issue  No.  96-18,  "Accounting  for
 Equity Instruments That Are Issued to Other Than Employees for Acquiring, or
 in Conjunction with Selling, Goods or Services."  All  transactions in which
 goods or services are the consideration received for the issuance  of equity
 instruments  are  accounted for based on the fair value of the consideration
 received  or the fair value  of  the  equity  instrument  issued,  whichever
 is  more  reliably  measurable.  The  measurement  date of the fair value of
 the  equity  instrument  issued is the  earlier  of  the  date  on which the
 counterparty's performance is complete or the date on  which  it is probable
 that performance will occur.

 Foreign Currency Translation and Foreign Currency Transactions
 --------------------------------------------------------------

 The Company's functional currency is the U.S. dollar.

 The Company's foreign operations are  subject to exchange rate  fluctuations
 and foreign currency transaction costs.  Monetary assets and liabilities  of
 subsidiaries domiciled outside the United States are translated at rates  of
 exchange existing  at  the  balance  sheet  date  and  non-monetary  assets,
 liabilities and equity  are translated at  historical rates.   Revenues  and
 expenses  are  translated  at  average  rates  of exchange prevailing during
 the year.  The resulting translation  adjustments  are recorded  within  the
 statement of operations   Foreign  currency transactions resulting in  gains
 and losses are recorded in the Statement of Operations.

 Advertising
 -----------
 Advertising costs are expensed as incurred and totaled  $37,317 and, $7,209,
 for the years ended October 31, 2005 and 2004, respectively.

 Recent Accounting Pronouncements
 --------------------------------
 In December 2004, the Financial Accounting Standards Board issued  Statement
 of  Financial  Accounting  Standards  No.  123  (revised  2004)  ("Statement
 123(R)"), "Share-Based Payment", which revised  SFAS No. 123 and  supercedes
 APB Opinion No.  25.   The revised  statement addresses  the accounting  for
 share-based payment  transactions with  employees and  other third  parties,
 eliminates the ability to account for share-based compensation  transactions
 with employees using APB Opinion No. 25 and requires that the fair value  of
 such share based  payments be recognized  in the  consolidated statement  of
 operations.  The revised statement is  effective as of the first interim  or
 annual financial reporting period  beginning after December  15, 2005.   The
 Company will  adopt the  statement on  November 1,  2006 as  required.   The
 impact of adoption  of Statement  123(R) cannot  be predicted  at this  time
 because it will  depend on  levels of  share-based payments  granted in  the
 future.  However, had the Company adopted Statement 123(R) in prior periods,
 the impact of that standard would  have approximated the impact of SFAS  No.
 123 as described in the disclosure  of pro forma net  loss and net loss  per
 share in the stock-based compensation policy note discussed previously.


 NOTE 3 - ASSET ACQUISITION

 On October 25, 2005,  the  Company  entered into an Asset Purchase Agreement
 to  acquire  certain assets,  including  but  not  limited  to  the customer
 base and an item of equipment (collectively,  the "Assets"),  of  Integrated
 Telecommunications,  Inc.  ("Integrated"),   an international long  distance
 carrier providing VoIP services to retail customers  in the  United  States,
 and   wholesale  services   to  customers  worldwide.  The  Company  intends
 to  utilize  Integrated's  wholesale  sales  and  support  staff   to manage
 its  existing  wholesale  operations,  as  well  as  leverage  the marketing
 relationships  developed  by  Integrated  to sell  the  Company's  new  VoIP
 products and services.  The results of the business acquired from Integrated
 have  been  included  in  operations  of  the  Company  in  the consolidated
 financial  statements  from  the  closing  date of the acquisition ("Closing
 Date"),  October  31,  2005.   The  aggregate  purchase  price was $159,500,
 including 950,000 of  common stock, valued at  $104,500,  and  an additional
 $55,000  in  acquisition-related  costs.  The  value  of  the  common  stock
 was  determined  based  on  the  closing  market  price  of  the   Company's
 common  shares  on  October 31, 2005. The Company has agreed to issue to the
 shareholders of Integrated  the following contingent shares provided certain
 performance criteria are met:

      (a)  950,000 shares of common stock (the "Earn-Out Shares") immediately
           following the  12-month anniversary  of the  Closing Date  if  the
           aggregate gross  profit  for  the 12-month  period  following  the
           Closing  Date  from   the  Company's   Integrated  division   (the
           "Division") is in excess  of $480,000 (the "Earn-Out  Threshold");
           provided, however,  that  if  the gross  profit  targets  are  not
           achieved by  the  Division, the  Company  shall instead  issue  to
           Integrated that number of  Earn-Out Shares determined by  reducing
           the total number thereof by the same percentage reduction in gross
           profit as  compared  to  the Earn-Out  Threshold.  The  percentage
           shortfall will  be  based  on the  entire  1,900,000  shares  (the
           initial consideration of 950,000 shares of common stock, plus  the
           contingent 950,000 shares ); and

      (b)  Warrants to purchase up to 600,000 shares of the Company's  common
           stock as follows: 300,000 warrants to be issued on each of the six
           and 12-month anniversary of the  Closing Date, the exercise  price
           to be determined on the grant date, provided that gross profit  of
           the Division increases  by a  minimum of  50% for  each six  month
           period, beginning on the  Closing Date and  ending on October  31,
           2006.  The gross profit increase for the initial six month  period
           will be measured against  a gross profit  amount of $40,000,  with
           the second six  month period  measured against  the preceding  six
           month period, provided, however, that if the gross profit  targets
           are not achieved by the Division, the Company shall instead  issue
           that number of  warrants determined by  reducing the total  number
           thereof by  the  same  percentage shortfall  in  gross  profit  as
           compared to the required 50% increase.   In each of the  six-month
           periods, if the  growth in gross  profit is less  than 50% of  the
           targeted growth, then no warrants will be earned.

 In accordance  with  Statement of  Financial  Accounting Standards  No.  141
 Business Combinations  ("SFAS 141"),  the contingent  consideration will  be
 recorded when the  contingency is resolved  and consideration  is issued  or
 becomes issuable.   Furthermore, as the contingent consideration is based on
 earnings, any additional consideration will change the recorded cost of  the
 customer base.  In accordance with  SFAS 141, the Company has allocated  the
 purchase price to the assets acquired  based on their estimated fair  values
 at the date  of acquisition. The  following table  summarizes the  estimated
 fair value of the assets acquired at the acquisition.

 The fair value of assets acquired consisted of:

                    Fixed assets                        $   15,215
                    Customer base                          144,285
                                                         ---------
                                                        $  159,500
                                                         =========

 The customer base will be amortized over its estimated useful life of two
 years.


 NOTE 4 - DISCONTINUED OPERATIONS


 Rapid Link Telecommunications GMBH
 ----------------------------------
 In the fourth quarter of fiscal year 2003, the Company's German Subsidiary,
 Rapid Link  Telecommunications  GMBH  ("Rapid  Link  Germany"),  filed  for
 insolvency.  The net  liability of approximately $2.3  million was included
 in the balance sheet  and classified as Discontinued  Operations at October
 31, 2003.   During  the  first quarter  of  fiscal year  2004,  the Company
 determined that it no  longer controlled the operations  of this subsidiary
 and that the parent entity  had no legal obligation  to pay the liabilities
 of Rapid Link  Germany.  Accordingly,  the Company wrote  off the remaining
 net  liability  of  $2,251,000  and  included   the  gain  in  Discontinued
 Operations during the first quarter of fiscal year 2004.

 Canmax Retail Systems
 ---------------------
 During the first quarter of fiscal  year 2004, the Company determined  based
 on final written communications with the State of Texas that the Company had
 a liability for sales taxes (including penalties and interest) totaling $1.1
 million.  The Company had previously accrued an estimated settlement  amount
 of $350,000 during  fiscal year 2003.   During the  first quarter of  fiscal
 year 2004, the Company accrued an  additional $750,000.  On August 5,  2005,
 the State of Texas filed  a lawsuit in the  53rd Judicial District Court  of
 Travis County,  Austin,  Texas against  the  Company. The  lawsuit  requests
 payment of approximately  $1.162  million including  penalties and for state
 and local sales  tax.  During the fiscal year  2005, the Company accrued  an
 additional $62,000 in amounts due.  The sales tax amount due is attributable
 to  audit  findings  of  the  State  of  Texas  for  the  years 1995 to 1999
 associated with Canmax  Retail Systems, a  current  subsidiary of  ours, and
 former operating subsidiary providing retail automation software and related
 services to the retail petroleum and convenience store industries. The State
 of Texas determined that Canmax Retail Systems did not properly remit  sales
 tax on  certain transactions.  Management believes  that it will be  able to
 negotiate  a reduced settlement amount with the state, although there can be
 no  assurance  that the  Company will  be successful  with  respect to  such
 negotiations.  These operations  were  previously classified as discontinued
 after the Company sold its retail  automation software business  in December
 1998  and  changed  its  business  model  to  international  wholesale   and
 retail business,  operating  as a facilities-based global Internet  protocol
 communications  company  providing  connectivity  to  international markets.
 Since  this  sales  tax  liability  represents  an  adjustment  to   amounts
 previously reported in discontinued  operations,  the  amount was classified
 as   Discontinued  Operations.  The amount that the  State of Texas assessed
 of $1.162  million has been accrued  as a liability  and is included  in the
 October 31, 2005 Balance Sheet as discontinued operations.  (See Note 12).


 NOTE 5 - CONVERTIBLE DEBENTURES AND NOTES PAYABLE

 In January 2002, the Company executed a 6% convertible debenture (the  "GCA-
 Debenture") with  GCA  Strategic  Investment  Fund  Limited  ("GCA"),  which
 provided financing of $550,000.  The GCA-Debenture's original maturity  date
 was January 28, 2003.  The GCA-Debenture is secured by certain property  and
 equipment previously classified as "held for sale".  The conversion price is
 equal to the  lesser of (i)  100% of the  volume weighted  average of  sales
 price as reported  by the Bloomberg  L.P. of the  common stock  on the  last
 trading day  immediately preceding  the Closing  Date and  (ii) 85%  of  the
 average of the three lowest volume weighted average sales prices as reported
 by Bloomberg L.P. during the twenty  Trading Days immediately preceding  but
 not including the  date of the  related Notice of  Conversion (the  "Formula
 Conversion Price").   In an  event of default  the amount  declared due  and
 payable on the GCA-Debenture shall be  at the Formula Conversion Price.   In
 connection with the  GCA-Debenture, the  Company paid  $92,625 in  financing
 fees,  which  were  capitalized  and  amortized  over the original  life  of
 the  GCA-Debenture.  At  October 31, 2003,  the deferred financing fees were
 fully amortized.  The Company calculated the beneficial  conversion  feature
 embedded in the GCA-Debenture in accordance  with EITF 98-5 "Accounting  for
 Convertible Securities with Beneficial  Conversion Features or  Contingently
 Adjustable Conversion Ratios" ("EITF-98-5")  and EITF 00-27 "Application  of
 Issue No.  98-5  to  Certain Convertible  Instruments"  ("EITF  00-27")  and
 recorded approximately $114,000 as  debt discount.   This debt discount  was
 amortized over  the  original  life  of  the  GCA-Debenture  and  was  fully
 amortized at October 31, 2003.  The Company also issued to the holder of the
 GCA-Debenture warrants to acquire  an aggregate of  50,000 shares of  common
 stock at an exercise price of $0.41  per share, which expire on January  28,
 2007.  The Company recorded debt  discount of approximately $17,000  related
 to the issuance of the warrants.   The Company determined the debt  discount
 by allocating the relative fair value to the GCA-Debenture and the warrants,
 and the Company amortized  the debt discount over  the original life of  the
 GCA-Debenture.  The debt discount was fully amortized at October 31, 2003.

 In January 2003, the Company and GCA  agreed to extend the maturity date  of
 the GCA-Debenture to November 8, 2004.  In consideration for this extension,
 in February 2003, the Company adjusted the exercise price of the  previously
 issued warrants to $0.21 per share.  The Company also issued to GCA warrants
 to purchase an additional 100,000 shares of common stock also at an exercise
 price of $0.21 per  share, which expire  on February 8,  2008.  The  Company
 recorded additional debt  discount of approximately  $17,000 related to  the
 warrant exercise price adjustment and the issuance of the new warrants.  The
 Company is amortizing the additional debt discount over the  GCA-Debenture's
 extension period.   For the  fiscal year  ended 2004,  the Company  recorded
 approximately $11,000 as  interest expense relating  to the amortization  of
 the debt discount.   The debt  discount was fully  amortized at October  31,
 2004.

 On  June 1, 2005,   GCA  agreed to  extend  the maturity  date of  the  GCA-
 Debenture.  The  maturity  date  was  extended  to  November  26, 2005.   In
 connection with the extension,  the Company issued  GCA warrants to  acquire
 110,000 shares of  common stock at  an exercise price  of $0.11 and  150,000
 warrants to  acquire the  Company's common  stock at  an exercise  price  of
 $0.38. Both warrants expire in June  2010. The Company recorded $104,693  as
 debt discount, representing the fair value of the warrants on June 1,  2005.
 This amount was calculated  using the Black-Scholes  pricing model with  the
 following assumptions:  applicable  risk-free  interest rate  based  on  the
 current treasury-bill interest rate at the grant date of 4%; dividend yields
 of 0%; volatility  factors of  the expected  market price  of the  Company's
 common stock of 1.64; and an  expected  life  of   the  warrants  of   three
 years.  The debt  discount is  being amortized over the extension period  of
 the convertible debenture.  In addition,  the Company issued to GCA  100,000
 shares of common  stock valued  at $0.45  per share,  the Company's  closing
 stock price on June 1, 2005, the date  of issuance.  In connection with  the
 stock issuance, the Company  has recorded $45,000 as  debt discount, and  is
 amortizing the debt discount  over the extension  period of the  convertible
 debenture.  For the year ended  October 31, 2005, approximately $127,000  of
 deferred financing fees and debt discount amortization has been recorded  as
 interest  expense.  The  GCA-Debenture  matured  in  November  2005  and  is
 currently due on demand.  Although no event of default has been declared  by
 GCA, the  Company is  technically in  default under  this agreement  and  is
 currently negotiating with GCA to extend the maturity date.

 During the years  ended October 31,  2005 and 2004,  GCA elected to  convert
 $35,000 and $10,000, respectively,  of the GCA-Debenture into  approximately
 352,000  and  82,000  shares  of  common  stock,  respectively.   The  gross
 outstanding balance  of  the  GCA-Debenture was  $455,000  and  $490,000  at
 October 31, 2005 and 2004, respectively.

 In July 2003, the Company executed a 10% note payable (the "GCA-Note")  with
 GCA, which provided  financing of  $550,000.   The GCA-Note  provided for  a
 maturity date of December 23, 2003 and is unsecured.  In the event the  GCA-
 Note was not repaid in full  within 10 days of  the maturity date, the  GCA-
 Note shall be  replaced by  a 6%  convertible debenture.   This  convertible
 debenture would have a maturity date of  November 8, 2004 and be secured  by
 certain property and equipment held for resale.  The conversion price  would
 be equal to the lesser of (i) 100%  of the volume weighted average of  sales
 price as reported  by the Bloomberg  L.P. of the  common stock  on the  last
 trading day immediately  preceding the Closing  Date, which  was $0.20,  and
 (ii) 85% of the  average of the three  lowest volume weighted average  sales
 prices as  reported  by  Bloomberg  L.P.  during  the  twenty  Trading  Days
 immediately preceding but not  including the date of  the related Notice  of
 Conversion (the "Formula Conversion  Price").  In an  event of default,  the
 amount declared due and payable on the convertible debenture would be at the
 Formula Conversion  Price.   In the  event the  GCA-Note was  replaced by  a
 convertible debenture,  the  GCA-Note  would have  a  beneficial  conversion
 feature.  In accordance with EITF  98-5 and EITF 00-27, the intrinsic  value
 of  the  beneficial  conversion  feature  was  calculated  as  approximately
 $104,000 at the commitment date using the  stock price as of that date,  and
 would be recorded if the note were not repaid as noted above.

 The GCA-Note matured during December 2003  and, accordingly, since the  GCA-
 Note remained unpaid as of January 2004, the Company exchanged the note  for
 a convertible  debenture.   Upon  the replacement  of  the GCA-Note  with  a
 convertible debenture, the  Company recorded  debt discount  of $104,000  as
 interest expense during the year ended October 31, 2004.  For the year ended
 October 31, 2004,  the Company  recorded approximately  $13,000 as  interest
 expense  relating to the amortization of these deferred financing fees.  The
 deferred financing  fees  were  fully  amortized  at  October 31, 2004.  The
 Company also issued  to the holder  of the GCA-Note  warrants to acquire  an
 aggregate of 100,000 shares  of common stock at  an exercise price of  $0.14
 per share, which expire on July  24, 2008.  The  relative fair value of  the
 warrants of  $7,000 was recorded as a debt discount, which was amortized  to
 interest expense over the original term of the GCA-Note.  For the year ended
 October 31, 2004,  the  Company recorded approximately  $3,000  as  interest
 expense relating  to  the  amortization  of  the  debt  discount.  The  debt
 discount was fully amortized at October 31, 2004.

 On June 1, 2005, the Company and GCA  agreed to extend the maturity date  of
 the GCA-Note to November  26, 2006.  In  connection with the extension,  the
 Company issued GCA warrants to acquire 150,000 shares of common stock at  an
 exercise price of $0.38,  which expire in June  2010.  The Company  recorded
 $58,458 as debt  discount, representing the  fair value of  the warrants  on
 June 1, 2005.   This amount was calculated  using the Black-Scholes  pricing
 model with  the following  assumptions: applicable  risk-free interest  rate
 based on the current  treasury-bill interest rate at  the grant date of  4%;
 dividend yields of 0%;  volatility factors of the  expected market price  of
 the  Company's  common  stock  of 1.64; and an expected life of the warrants
 of three years.  The debt  discount is  being amortized  over the  extension
 period of the convertible debenture. In addition, the Company issued to  GCA
 40,000 shares  of common  stock valued  at $0.45  per share,  the  Company's
 closing stock price on June  1, 2005, the date  of issuance.  In  connection
 with the stock issuance, the Company  has recorded $18,000 as debt  discount
 and is  amortizing  the debt  discount  over  the extension  period  of  the
 convertible debenture.  For the year  ended October 31, 2005,  approximately
 $21,000 of deferred financing fees and  debt discount amortization has  been
 recorded as interest expense. The gross outstanding balance of the  GCA-Note
 was $552,000 at October 31, 2005 and 2004, respectively.

 In November 2002, the  Company executed a 12%  note payable (the  "GC-Note")
 with Global Capital Funding Group, L.P., ("Global") which provided financing
 of $1,250,000. The GC-Note's  maturity date was November  8, 2004.  The  GC-
 Note is secured by certain property  and equipment with an original cost  of
 $1,518,267.  In  connection with the  GC-Note, the Company  paid $47,441  as
 financing fees, which were  capitalized and amortized over  the life of  the
 GC-Note.   For  the  year  ended  October  31,  2004  the  Company  recorded
 approximately $23,000 as  interest expense relating  to the amortization  of
 these deferred  financing fees.   The  deferred  financing fees  were  fully
 amortized at October 31, 2004.  The Company also issued to the holder of the
 GC-Note warrants to acquire an aggregate  of 500,000 shares of common  stock
 at an exercise price of $0.14 per  share, which expire on November 8,  2007.
 The Company recorded  debt discount of  approximately $46,000, the  relative
 fair value of the warrants, which  were amortized over the two-year life  of
 the GC-Note.   For the  year ended October  31, 2004,  the Company  recorded
 approximately $23,000 as  interest expense relating  to the amortization  of
 the debt discount.   The debt  discount was fully  amortized at October  31,
 2004.

 On June 1, 2005, the Company and  Global agreed to extend the  maturity date
 of the GC-Note to February 29, 2008.  In connection with the extension,  the
 GC-Note was  converted to  a 10.08%  Convertible  Note  ("GC-Conote").   The
 conversion price is equal to 80% of  the average of the three lowest  volume
 weighted average  sales prices  as reported  by  Bloomberg L.P.  during  the
 twenty Trading Days immediately preceding  the related Notice of  Conversion
 (the "Formula  Conversion Price").  The  Company calculated  the  beneficial
 conversion feature embedded in  the GC-Conote in  accordance with EITF  98-5
 and EITF 00-27 and recorded $1,013,032 as debt discount. This debt  discount
 is being amortized over the life of the GC-Conote.  The Company also  issued
 to the holder of the GC-Conote  warrants to acquire an aggregate of  500,000
 shares of common stock at an  exercise price of $0.38, and 125,000  warrants
 to purchase common stock at $0.11 per share, both warrants expiring in  June
 2010.  The  Company recorded $200,498  as debt discount,  the relative  fair
 value of the warrants on June 1, 2005.  This amount was calculated using the
 Black-Scholes pricing model with the following assumptions: applicable risk-
 free interest rate based on the  current treasury-bill interest rate at  the
 grant date of 4%; dividend yields of 0%; volatility factors of the  expected
 market price of the Company's common stock of 1.64; and an expected life  of
 the warrants of three years.  The debt discount is being amortized over  the
 life of the  GC-Conote. In addition,  the Company issued  to Global  100,000
 shares of common  stock valued  at $0.45  per share,  the Company's  closing
 stock price on June 1, 2005, the date of issuance. The Company has  recorded
 $36,469 as debt discount, the relative  fair value of the stock issued,  and
 is amortizing the debt  discount over the  life of the  GC-Conote.  For  the
 year ended  October  31,  2005,  approximately  $189,000  of  debt  discount
 amortization has been recorded as interest  expense.  The gross  outstanding
 balance of the GC-Conote was $1,250,000 at October 31, 2005.

 In connection with the  extension of the maturity  date of the GC-Note,  the
 interest due on the  GC-Note of approximately $350,000  as of  May 31, 2005,
 was converted to  a $400,000 non-interest  bearing convertible note  payable
 (the "GC-Conote2) to Global.  The  GC-Conote2 requires quarterly payments of
 $50,000 on the last day of March, June, September and December of each  year
 until the March 31,  2007 maturity Date,  commencing on June  30, 2005.   In
 addition, the GC-Conote2 provides for conversion based on a conversion price
 equal to 80%  of the  average of the  three lowest  volume weighted  average
 sales prices as reported  by Bloomberg L.P. during  the twenty trading  days
 immediately  preceding  the  related  Notice  of  Conversion  (the  "Formula
 Conversion Price"). The Company calculated the beneficial conversion feature
 embedded in the GC-Conote2 in accordance  with EITF 98-5 and EITF 00-27  and
 recorded approximately  $350,000 as  debt discount.  This debt  discount  is
 being amortized over the  life of the GC-Conote2.   The approximate  $50,000
 difference between the accrued interest at May 31, 2005 and the value of the
 GC-Conote2 represents a financing fee and was recorded as debt discount  and
 is being amortized  over the life  of the GC-Conote2.   For  the year  ended
 October 31, 2005, approximately $175,000  of debt discount amortization  has
 been recorded as interest expense. The Company did not make the payment  due
 on the  GC-Conote2 on  September 30,  2005.   The GC-Note  includes  certain
 default provisions that can be enforced by Global as a result of nonpayment.
 The Company is in  negotiations with Global  to allow it  to extend the  due
 date of  this payment.   This  past  due amount  is  included as  a  current
 liability on our balance sheet as of October 31, 2005.

 During the year ended  October 31, 2005, GCA  elected to convert $75,000  of
 the GC-Conote into approximately 657,000 shares of common stock.  The  gross
 outstanding balance of the GC-Conote was $275,000 at October 31, 2005.


 NOTE 6 - NOTES PAYABLE - RELATED PARTY

 In October 2001, the  Company executed 10%  convertible notes (the  "Notes")
 with three  executives (the  "Executives") of  the Company,  which  provided
 financing in  the  aggregate principal  amount  of $1,945,958.  One  of  the
 Executives subsequently  resigned  from  the  Company  but  remains  on  the
 Company's Board of Directors.  The  original maturity date of each note  was
 October 24, 2003.   In January  2003, the Executives  extended the  maturity
 date of each note to February  24, 2004.  The  Notes are secured by  certain
 Company assets.  Each Note is convertible into the Company's common stock at
 the option of the holder at any time.  The conversion price is equal to  the
 closing bid price  of the  Company's common stock  on the  last trading  day
 immediately  preceding  the  conversion.  The  Company  has  calculated  the
 beneficial conversion feature embedded in the Notes in accordance with  EITF
 98-5 and EITF  00-27 and recorded  debt discount  of approximately  $171,000
 which was amortized over  two years, the  original term of  the Notes.   The
 Company also  issued to  the holders  of the  Notes warrants  to acquire  an
 aggregate of 1,945,958 shares of common stock at an exercise price of  $0.78
 per share, which expire  on October 24, 2006.   Additional debt discount  of
 approximately $657,000 was recorded during the fourth quarter of fiscal 2001
 relating to  these  warrants.  The  Company determined  the additional  debt
 discount by  allocating  the  relative  fair value  to  the  Notes  and  the
 warrants.  The Company amortized the additional debt discount over the  life
 of the Notes.  The  debt discount was fully  amortized at October 31,  2003.
 In January 2002, an additional $102,432  was added to the Notes in  exchange
 for an existing note payable.  The Company also issued to the holder of  the
 Notes warrants to acquire an additional 102,432 shares of common stock at an
 exercise price of $0.75, which expire on January 28, 2007.  Additional  debt
 discount, related to these warrants,  of approximately $24,000 was  recorded
 during the  first  quarter of  fiscal  2002.   The  Company  determined  the
 additional debt discount by allocating the relative fair value to the  Notes
 and the warrants.  The Company  amortized the additional debt discount  over
 the remaining life of the Notes.   In July 2002, an additional $300,000  was
 added to the Notes, in exchange for  an existing note payable.  The  Company
 also issued to  the holder of  the Notes warrants  to acquire an  additional
 300,000 shares of common stock at  an exercise price of $0.75, which  expire
 on July 8,  2007.   Additional debt  discount of  approximately $22,000  was
 recorded as  interest  expense  during the  third  quarter  of  fiscal  2002
 relating to these warrants.  The gross outstanding balance  of  the Notes at
 October 31, 2005 and 2004 was $1,003,390 and $1,470,890, respectively.

 On July  21, 2005,  the Company  and  the Executives  agreed to  extend  the
 maturity date of the  Notes to February  29, 2008.   In connection with  the
 extension, the Company issued  to the three  executives warrants to  acquire
 640,000 shares of common stock at an exercise price of $0.16.  The  warrants
 expire in July 2010. The Company recorded $88,238 as debt discount, the fair
 value of the warrants on July 21, 2005. This amount was calculated using the
 Black-Scholes pricing model with the following assumptions: applicable risk-
 free interest rate based on the  current treasury-bill interest rate at  the
 grant date of 4%; dividend yields of 0%; volatility factors of the  expected
 market price of the Company's common stock of 1.65; and an expected life  of
 the  warrants  of  three years.  The debt  discount is being amortized  over
 the extension period  of the  Notes. For the  year ended  October 31,  2005,
 approximately $11,000 of  debt discount  amortization has  been recorded  as
 interest expense. (See Note 16 - Subsequent Events)

 During the years ended October  31, 2005 and 2004,  the holder of the  Notes
 elected to convert $467,500  and $877,500, respectively,  of the Notes  into
 3,740,000 and 6,750,000 shares of common stock, respectively.


 NOTE 7 - PROPERTY AND EQUIPMENT

 Property and equipment consists of the following at October 31, 2005 and
 2004:

                                                2005              2004
                                             ----------        ----------
      Telephone switch equipment            $ 3,762,473       $ 3,759,818
      Leasehold improvements                     58,379            58,379
      Furniture and fixtures                    232,917           232,917
      Computer equipment                        859,296           852,011
      Computer software                       1,096,879         1,079,159
                                             ----------        ----------
                                              6,009,944         5,982,283
      Less: accumulated depreciation
        and amortization                     (5,656,218)       (5,112,326)
                                             ----------        ----------
                                            $   353,726       $   869,957
                                             ==========        ==========

 At October 31, 2005 and 2004, the gross amount of telephone switch equipment
 under capital lease totaling $455,728 was fully amortized.

 Amortization  of  assets  held  under   capital  leases  is  included   with
 depreciation expense. Depreciation and amortization expense totaled $557,131
 and $615,883 in fiscal 2005 and 2004, respectively.


 NOTE 8 - GAIN ON SETTLEMENT OF LIABILITIES/LEGAL SETTLEMENT

 During the  second quarter  of fiscal  year 2003,  the Company  vacated  its
 office  space  in  Atlanta,  Georgia.   At  that  time,  the  Company  began
 negotiations with the landlord to terminate its lease agreement.  In October
 2004, the Company reached an agreement with the landlord to pay $100,000  in
 settlement of  all outstanding  rents, payable  in monthly  installments  of
 $5,000  through May  2006.  As a result,  the Company  recorded $241,000  as
 "Gain on  settlement  of  liabilities/legal settlement"  during  the  fourth
 quarter of  fiscal  year  2004,  representing  the  difference  between  the
 Company's accrued rent and the settlement amount.

 In connection  with  the  acquisition  of the  assets  and  certain  of  the
 liabilities of Rapid Link, Incorporated ("RLI") during the fourth quarter of
 the fiscal  year  ended  October 31,  2001,  the  Company  recorded  certain
 liabilities of $255,000, and continued to  hold those liabilities pending  a
 final settlement with the RLI trustee.  During the second quarter of  fiscal
 year 2004, the Company agreed to pay $30,000 in full and final settlement to
 the trustee and has recorded the  remaining $225,000 as "Gain on  settlement
 of liabilities/legal settlement"  during the fiscal  year ended October  31,
 2004.

 On July 20, 2004,  the Company  filed a suit  against Q Comm  International,
 Inc. ("Q Comm")  in Federal  Court in  the Central  District of  Utah.   The
 Company's suit claimed damages of $4 million plus attorney's fees and  costs
 resulting from the  breach of a  purchase agreement on  the part  of Q  Comm
 relating to the sale of the Company's internally developed equipment for the
 prepaid telecommunications industry.  Pursuant to the terms of the  purchase
 agreement, the Company would deliver the source code of certain  proprietary
 software in consideration for an aggregate purchase price of $4 million,  of
 which $1 million was  due at closing  and the remainder  was due over  three
 years.  Following  execution  of the  agreement,  the Company  tendered  the
 software source code to Q Comm.  However,  Q Comm failed to pay the  Company
 the initial amount  due under the  agreement and made  copies of the  source
 code without the Company's permission.

 During the  fourth  quarter of  fiscal  2005,  the Company  entered  into  a
 Settlement and Release Agreement with Q Comm.  The Agreement releases Q Comm
 from any and all claims in  connection with the Company's lawsuit against  Q
 Comm for breach of  a purchase agreement.   In connection with the  release,
 the Company agreed to a cash  settlement of $225,000, which was received  on
 August 10,  2005.   This  amount  was recorded  as  "Gain on  settlement  of
 liabilities/legal settlement" during the fiscal year ended October 31, 2005.


 NOTE 9 - RESOLUTION OF VENDOR DISPUTE

 During the  first  quarter  of  the fiscal  2005,  the  Company  recorded  a
 reduction of $283,138 to Costs of Revenues in its Consolidated Statement  of
 Operations.  This amount  represents the favorable  resolution of a  dispute
 with one of the Company's on-going  vendors.  This amount had been  recorded
 to Costs of Revenues in prior periods.


 NOTE 10 - STOCK OPTIONS AND WARRANTS

 Warrant Issuances to Employees for Financing Transactions
 ---------------------------------------------------------
 Employee warrant activity for the two years ended October 31, 2005 was as
 follows:

                                                                   Weighted
                                        Number       Warrant       Average
                                          of          Price        Exercise
                                        Shares      Per Share       Price
                                      ---------    -----------     --------
 Warrants outstanding at
   October 31, 2003                   2,648,391   $0.75 - 1.44    $    0.83

 Warrants granted                             -              -            -
 Warrants exercised                           -              -            -
 Warrants canceled                            -              -            -
                                      ---------    -----------     --------
 Warrants outstanding at
   October 31, 2004                   2,648,391    0.75 - 1.44         0.83

 Warrants granted                       640,000           0.16         0.16
 Warrants exercised                           -              -            -
 Warrants canceled                     (300,000)          1.44         1.44
                                      ---------    -----------     --------
 Warrants outstanding at
   October 31, 2005                   2,988,391   $0.16 - 1.44    $    0.62
                                      =========    ===========     ========

 The warrants issued to employees that  were exercisable at October 31,  2005
 and 2004 were approximately 2,988,000 and 2,648,000, respectively.

 Warrant Issuances to Non-Employees

 Non-Employee warrant activity for the two years ended October 31, 2005 was
 as follows:

                                                                   Weighted
                                        Number       Warrant       Average
                                          of          Price        Exercise
                                        Shares      Per Share       Price
                                      ---------    -----------     --------
 Warrants outstanding at
   October 31, 2003                   1,587,500   $0.01 - 3.50    $    1.16

 Warrants granted                             -              -            -
 Warrants exercised                           -              -            -
 Warrants canceled                     (150,000)          3.00         3.00
                                      ---------    -----------     --------
 Warrants outstanding at
   October 31, 2004                   1,437,500    0.01 - 3.50         0.97

 Warrants granted                     2,035,000    0.11 - 0.78         0.55
 Warrants exercised                           -              -            -
 Warrants canceled                     (212,500)          0.01         0.01
                                      ---------    -----------     --------
 Warrants outstanding at
   October 31, 2005                   3,260,000   $0.11 - 3.50    $    0.77
                                      =========    ===========     ========

 The majority of  the warrants issued  to non-employees  during fiscal  years
 2005 and 2004 were issued in  connection with debt financing.  In  addition,
 the Company issued 1,000,000 warrants to a provider of legal and  consulting
 services during the fiscal year ended October 31, 2005.  The warrants issued
 to non-employees that were exercisable at October 31, 2005 and 2004  totaled
 3,260,000 and 1,437,500, respectively.

 Stock Options

 2002 Equity Incentive Plan

 The Company adopted the 2002 Equity Incentive Plan ("Incentive Plan") at the
 Company's  annual  shareholder  meeting in  May  2002.  The  Incentive  Plan
 authorized the  Board of  Directors  to grant  up  to 2,000,000  options  to
 purchase common shares of the Company.  The number of options available  for
 grant was increased to 4,000,000 at the Company's annual shareholder meeting
 in October 2005.  The maximum number of shares of common stock, which may be
 issuable under the  Incentive Plan to  any individual  plan participant,  is
 500,000 shares.  All  options granted under the Incentive Plan have  vesting
 periods up to  a maximum of  five  years.  The exercise price  of an  option
 granted under the  Incentive Plan shall  not be less  than 85%  of the  fair
 value of the common stock on the date such option is granted.

 Amended and restated 1990 Stock Option Plan

 The  1990  Stock  Option  Plan  ("1990  Stock  Option  Plan"),  as  amended,
 authorizes the  Board of  Directors  to grant  up  to 2,300,000  options  to
 purchase common shares  of the Company.  No options will  be granted to  any
 individual director or employee,  which will, when  exercised, exceed 5%  of
 the issued and  outstanding shares of  the Company. The  term of any  option
 granted under the 1990 Stock Option Plan is fixed by the Board of  Directors
 at the time the options are  granted, provided that the exercise period  may
 not be longer  than 10 years  from the date  of grant.  All options  granted
 under the 1990 Stock Option Plan have  up to 10-year terms and have  vesting
 periods that range from 0 to 3 years from the grant date. The exercise price
 of any options granted under the 1990  Stock Option Plan is the fair  market
 value at the date of grant.  The Company no longer issues options under this
 plan.

 The Company's stock option activity for the two years ended October 31, 2005
 was as follows:
                                                                   Weighted
                                        Number       Option        Average
                                          of          Price        Exercise
                                        Shares      Per Share       Price
                                      ---------    -----------     --------
 Options outstanding at
   October 31, 2003                   1,444,000   $0.09 - 1.50    $    0.41

 Options granted                        410,000    0.11 - 0.14         0.12
 Options exercised                            -              -            -
 Options canceled                      (180,000)   0.09 - 0.78         0.32
                                      ---------    -----------     --------
 Options outstanding at
   October 31, 2004                   1,674,000    0.11 - 1.50         0.35

 Options granted                              -              -            -
 Options exercised                            -              -            -
 Options canceled                      (101,000)   0.12 - 0.70         0.22
                                      ---------    -----------     --------
 Options outstanding at
   October 31, 2005                   1,573,000   $0.11 - 1.50    $    0.36
                                      =========    ===========     ========


 The following table summarizes information about employee compensatory stock
 options outstanding at October 31, 2005:

                                          Weighted
                              Weighted     Average
    Range of     Options/     Average  Exercise Price                Prices of
    Exercise     Warrants    Remaining    of Options     Options      Options
     Prices     Outstanding     Life     Outstanding   Exercisable  Exercisable
  ------------   ---------      ----         ----       ---------      ----
 $0.11 - $0.26     345,000      8.44        $0.13         184,167     $0.13
 $0.42 - $1.50   1,228,000      0.80         0.42       1,228,000      0.42
                 ---------      ----         ----       ---------      ----
                 1,573,000      2.48        $0.36       1,412,167     $0.39
                 =========      ====         ====       =========      ====

 There were no options issued to employees during the fiscal year ended
 October 31, 2005.


 NOTE 11 - INCOME TAXES

 Deferred income taxes reflect the net  tax effects of temporary  differences
 between the  carrying  amounts  of  assets  and  liabilities  for  financial
 reporting purposes  and  the  amounts  reported  for  income  tax  purposes.
 Significant components of the Company's deferred tax assets and  liabilities
 at October 31, 2005 and 2004 are as follows:

                                             2005             2004
                                          ----------       ----------
 Deferred tax assets
   Net operating loss carryovers         $15,769,757      $15,205,732
   Accounts receivable                       145,214           41,579
   Advertising credits                       977,185          977,185
   Property and equipment                    227,065          184,176
   Warrants                                   54,296                -
   Accrued liabilities                        27,525           34,694
                                          ----------       ----------
     Total gross deferred tax assets      17,201,042       16,443,366

 Deferred tax liabilities
   Goodwill                                 (164,753)        (117,773)
                                          ----------       ----------
     Total gross deferred tax liabilities   (164,753)        (117,773)

      Net deferred tax liabilities          (164,753)        (117,773)

      Valuation allowance                (17,036,289)     (16,325,593)
                                          ----------       ----------
    Net deferred assets                  $         -      $         -
                                          ==========       ==========


                                             2005             2004
                                          ----------       ----------
 Income tax benefit at statutory rate    $  (872,216)     $  (578,676)
 Permanent differences                       180,396           62,483
 Change in valuation allowance               710,696          505,079
 Other                                       (18,876)          11,114
                                          ----------       ----------
                                         $         -      $         -
                                          ==========       ==========

 The increase in the valuation allowance for the years ended October 31, 2005
 and 2004 of $711,000 and $505,000, respectively, was related primarily to  a
 change in U.S. operating loss carryforwards.

 At October 31, 2005, the Company  has U.S. net operating loss  carryforwards
 for federal income tax purposes of  approximately $46 million, which  expire
 in 2006 through 2025. Utilization of U.S. net operating losses is subject to
 annual limitations provided  for by the  Internal Revenue  Code. The  annual
 limitation may also result in the expiration of net operating losses  before
 utilization.

 Realization of  tax benefits  depends on  having sufficient  taxable  income
 within the  carryback  and  carryforward periods.  The  Company  continually
 reviews the  adequacy  of  the  valuation  allowance  and  recognizes  these
 benefits as reassessment indicates that it is more likely than not that  the
 benefits will be realized.  Based  on pretax losses incurred in prior years,
 management has  established a  valuation allowance  against the  entire  net
 deferred asset balance.


 NOTE 12 - COMMITMENTS AND CONTINGENCIES

 The Company has  one capital lease  as of   October 31, 2005.   The  Company
 leases its branch office facilities and  its corporate office under  various
 noncancelable operating leases with terms expiring at various dates  through
 2007.  Rental expense  from continuing operations  for operating leases  was
 $248,874 and $502,940 for the fiscal years ended October 31, 2005 and  2004,
 respectively.

 Future minimum lease payments under noncancelable operating leases and its
 capital lease as of October 31, 2005 are as follows:

                                                Capital        Operating
                                                Leases           Leases
                                              ----------       ----------
    Year ending October 31,
                2006                         $   126,196      $   168,854
                2007                                   -           54,595
                                              ----------       ----------
    Total minimum lease pmts                 $   126,196      $   223,449
                                              ==========       ==========


 Legal Proceedings
 -----------------
 The Company, from  time to  time, may be  subject to  legal proceedings  and
 claims in  the ordinary  course of  business,  including claims  of  alleged
 infringement of trademarks and other intellectual property of third  parties
 by the Company. Such  claims, even if not  meritorious, could result in  the
 expenditure of significant financial and managerial resources.

 On June  12, 2001,  Cygnus  Telecommunications Technology,  LLC  ("Cygnus"),
 filed a patent  infringement suit (case  no. 01-6052) in  the United  States
 District  court,  Central  District  of  California,  with  respect  to  the
 Company's "international reorigination" technology.   The injunctive  relief
 that Cygnus sought  in this suit  has been denied,  but Cygnus continues  to
 seek a license fee for the use of the technology.  The Company believes that
 no license fee  is required  as the technology  described in  the patent  is
 different from the technology used by the Company.

 In August  2002, Cygnus  filed  a motion  for  a preliminary  injunction  to
 prevent the Company  from providing "reorigination"  services.  The  Company
 filed a cross motion for summary judgment of non-infringement.  Both motions
 were  denied.  On  August 22,  2003,  the Company  re-filed the  motion  for
 summary judgment for non-infringement.  In  response to this filing,  during
 August 2004, the  court narrowly defined  the issue to  relate to a  certain
 reorigination technology, which the  Company believes it  does not now,  nor
 has it ever utilized to provide any of its telecommunications services.   On
 August 17, 2005, the United States District Court for the Northern  District
 of California issued a  stay in the lawsuit  for the purpose of  reexamining
 the Cygnus  patent.   This stay  is the  result of  a reexamination  request
 received by the United States Patent and Trademark Office ("USPTO"), whereby
 the USPTO has issued a decision that the patents are invalid. That decision,
 however, is not final so that further proceedings are expected to  continue.
 The Company intends to continue defending  this case vigorously, and  though
 its ultimate  legal  and financial  liability  with respect  to  such  legal
 proceeding is therefore expected to be minimal, the potential loss or  range
 of loss cannot be estimated with any certainty at this time.

 The State  of Texas  ("State") performed  a sales  tax audit  Canmax  Retail
 Systems   a  current  subsidiary   of  the  Company,  and  former  operating
 subsidiary providing retail automation software and related services to  the
 retail petroleum and  convenience store industries,  for the  years 1995  to
 1999.  The  State determined  that Canmax  Retail Systems  did not  properly
 remit sales  tax  on certain  transactions,  including asset  purchases  and
 software development  projects  that  Canmax Retail  Systems  performed  for
 specific  customers.  The  Company's  current  and former  management  filed
 exceptions, through its outside sales tax  consultant, to the State's  audit
 findings,  including  the  non-taxable  nature  of certain transactions.  In
 correspondence from the  State in June  2003, the State  agreed to  consider
 certain offsetting remittances received by Canmax Retail Systems during  the
 audit period.  The  State has refused to  consider other potential  offsets.
 Based on this correspondence  with the State,  management's estimate of  the
 potential liability was  originally recorded at  $350,000 during the  fiscal
 year ended  October 31,  2003.   Based on  further correspondence  with  the
 State, this estimated  liability was increased  to $1.1  million during  the
 first  quarter  of  fiscal  year  2004.   Since  this  sales  tax  liability
 represents an  adjustment to  amounts  previously reported  in  discontinued
 operations, it was classified separately during the first quarter of  fiscal
 year 2004 in discontinued  operations, and was included  in the October  31,
 2004  consolidated   balance  sheet   in  "Net   current  liabilities   from
 discontinued operations".

 On August 5, 2005, the State of Texas  filed a lawsuit in the 53rd  Judicial
 District Court  of Travis  County, Austin,  Texas against  the Company.  The
 lawsuit requests payment of approximately $1.162 million including penalties
 and interest for state and local sales.  During the  third quarter of fiscal
 year 2005, the Company accrued an additional $62,000  related  to  the state
 tax  amounts  due,  increasing  the  liability to  $1.162  million.  This is
 included in the October 31, 2005 consolidated balance sheet  in "Net current
 liabilities from discontinued operations".  Management believes that it will
 be able to negotiate  a reduced  settlement  amount with the state, although
 there can be no assurance that the  Company will be successful  with respect
 to such negotiations.  The Company will continue to aggressively  pursue the
 collection of  unpaid sales  taxes from  former customers  of Canmax  Retail
 Systems, primarily  Southland  Corporation, now  7-Eleven  Corporation  ("7-
 Eleven"), as a  majority of the  amount owed to  the State of  Texas is  the
 result of uncollected taxes from the sale of software to 7-Eleven during the
 period under audit (see below).  However, there can be no assurance that the
 Company will be successful with respect to such collections.

 On January 12, 2004, the Company filed a suit against 7-Eleven in the  162nd
 District Court in  Dallas, Texas.   The Company's  suit claims  a breach  of
 contract on the part of 7-Eleven in  failing to reimburse it for taxes  paid
 to the State as  well as related  taxes for which  the Company is  currently
 being held responsible by the State.  The Company's suit seeks reimbursement
 for the  taxes  paid and  a  determination by  the  court that  7-Eleven  is
 responsible for paying the remaining tax liability to the State.


 NOTE 13 - BENEFIT PLAN

 Effective January 1, 1994, the Company  implemented a 401(k) Profit  Sharing
 Plan for  all employees  of the  Company. The  Plan provides  for  voluntary
 contributions by employees into the Plan subject to the limitations  imposed
 by the Internal Revenue Code Section 401(k). The Company may match  employee
 contributions to a discretionary percentage of the employee's  contribution.
 The Company's matching funds are determined  at the discretion of the  Board
 of Directors and are subject to a six-year vesting schedule from the date of
 original employment.  The Company  matched $11,245  during the  fiscal  year
 ended October 31, 2005.  The  Company made no matching contributions  during
 the fiscal year ended October 31, 2004.


 NOTE 14 - BUSINESS AND CREDIT CONCENTRATIONS

 In the normal course  of business, the Company  extends unsecured credit  to
 virtually all of its  customers.  Management has  provided an allowance  for
 doubtful accounts, which reflects its estimate of amounts, which may  become
 uncollectible.  In the  event of complete  non-performance by the  Company's
 customers, the maximum exposure to the  Company is the outstanding  accounts
 receivable balance at the date of non-performance.

 During the  year ended  October 31,  2005,  the Company  provided  wholesale
 services to  a  customer who  accounted  for  11% of  revenues  and  another
 customer who accounted for 13% of revenues.  During the same period, one  of
 the Company's suppliers  accounted for  approximately 20%  of the  Company's
 total costs of  revenues and  another supplier  accounted for  11% of  total
 costs of revenues.  At October 31,  2005, one customer accounted for 35%  of
 the Company's trade accounts receivable.  During the year ended October  31,
 2004, the Company provided  wholesale services to  a customer who  accounted
 for 17% of revenues and another customer who accounted for 13% of  revenues.
 During the  same  period,  one of  the  Company's  suppliers  accounted  for
 approximately 20% of the Company's total costs of revenues.  At October  31,
 2004, one  customer  accounted  for 16%  of  the  Company's  trade  accounts
 receivable.  Due to the highly competitive nature of the  telecommunications
 business, the Company believes that the loss of any carrier would not have a
 long-term material impact on its business.

 Information regarding the Company's domestic and foreign revenues is as
 follows:

                                   All other
                                    foreign
                     Africa         revenues       Domestic          Total
                   ----------      ----------      ----------      ----------
 Fiscal 2004      $ 1,617,433     $ 1,284,641     $10,478,436     $13,380,510
 Fiscal 2005      $ 2,201,290     $ 1,215,614     $ 6,410,145     $ 9,827,049

 No individual foreign country  represented more than  10 percent of  revenue
 for the fiscal year ended October 31, 2004 or more than 10 percent of  long-
 lived assets for the  fiscal years ended October  31, 2005 and 2004.  During
 the fiscal year  ended October 31,  2005, 20% of  the Company's revenue  was
 generated from customers in South Africa.


 NOTE 15 - CAPITAL STOCK

 During the year ended October 31, 2005, in connection with the extension  of
 the maturity  date of  the GCA-Debenture,  the  Company issued  GCA  100,000
 shares of common stock.

 During the year ended October 31, 2005, in connection with the extension  of
 the maturity date of the GCA-Note,  the Company issued GCA 40,000 shares  of
 common stock.

 During the year ended October 31, 2005, in connection with the extension  of
 the maturity date of the GC-Note,  the Company issued Global 100,000  shares
 of common stock.

 During the years ended October 31, 2005  and 2004, the three holders of  the
 Company's Related Party Notes converted $467,500 and $877,500, respectively,
 of debt into 3,740,000 and 6,750,000 shares, respectively, of the  Company's
 common stock.

 During the year  ended October 31,  2005 and 2004,  the holder  of the  GCA-
 Debenture converted approximately $43,000 and $10,000, respectively, of debt
 and  accrued  interest  into   approximately  352,000  and  82,000   shares,
 respectively, of the Company's common stock.

 During the  year  ended  October  31, 2005,  the  holder  of  the  GC-Conote
 converted $75,000 of debt into approximately 656,000 shares of the Company's
 common stock.

 During the year ended October 31, 2005, the Company issued 200,000 shares of
 common stock  for investor  relations' services  and  were recorded  at  the
 stock's fair market value at the date of issuance.

 During the year ended October 31, 2005, the Company issued 125,000 shares of
 common stock for legal services and were recorded at the stock's fair market
 value at the date of issuance.

 In October 2005, the  Company issued 950,000 shares  in connection with  the
 Company's purchase  of certain  assets, including  but  not limited  to  the
 customer base, and certain specified contracts  and an item of equipment  of
 Integrated Communications,  Inc., Inc,  valued at  $104,500 at  the date  of
 issuance (see Note 3).

 The following table describes stock reserved for future issuances at October
 31, 2005:

                                               # Shares
                                              ----------
       Options                                 5,228,000
       Warrants                                6,248,391
       Convertible debt (1)                   46,567,470
                                              ----------
                                              58,043,861
                                              ==========

  (1) Assumes conversion on October 31, 2005 under the terms of the related
  agreements


 NOTE 16 - SUBSEQUENT EVENTS

 The Company has filed  an action in the  Los Angeles Superior Court  against
 Yahoo for claims  related to a  stock sale agreement  that exchanged  common
 stock in the Company for media credits in various publications.  Some of the
 media credits were  provided in accordance  with the contract  terms,  but a
 majority of the media credits have not been provided.

 Since October 31, 2005,  our  chief executive officer  has advanced funds to
 our Company in the aggregate amount of $500,000.  We have not yet formalized
 the terms of these advances, but we expect to enter  into an agreement  with
 Mr. Jenkins on substantially the same terms and conditions as our next round
 of debt financing.  If we do not obtain debt financing by February 28, 2006,
 we  will  negotiate  the  terms  of these advances with Mr. Jenkins at arms'
 length.


                                EXHIBIT INDEX

 NO. DESCRIPTION OF EXHIBIT

  3.4  Amendment to Certificate of Incorporation

 21.1  Subsidiaries of the Registrant

 23.1  Consent of Independent Registered Public Accounting Firm

 31.1  Certificate of Chief Executive Officer pursuant to Rule 13a-14(a)
       and Rule 15d-14(a) of the Securities Exchange Act of 1934

 31.2  Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)
       and Rule 15d-14(a) of the Securities Exchange Act of 1934

 32.1  Certificate of Chief Executive Officer pursuant to 18 U.S.C.
       Section 1350

 32.2  Certificate of Chief Financial Officer pursuant to 18 U.S.C.
       Section 1350