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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, DC 20549
 FORM 10-KSB/A
 Annual Report Under Section 13 or 15(d) of
the Securities Exchange Act of 1934
 For the fiscal year ended September 30, 2003
 Commission file number: 2-42114
 
 Local Telecom Systems, Inc.
  State of Nevada
    
    75-1310613(State or Other Jurisdiction of
    
    (I.R.S. Employer Identification No)Incorporation or Organization)
  
   
    þ o
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PART I
    
    
    3Item 1. Description of Business
    
    
    3(a) Business Development
    
    
    3(b) Business of Issuer
    
    
    4Item 2. Description of Property
    
    
    7Item 3. Legal Proceedings
    
    
    8Item 4. Submission of Matters to a Vote of Security Holders
    
    
    8PART II
    
    
    8Item 5. Market for Common Equity and Related Stockholder Matters
    
    
    8(a) Market Information
    
    
    8(b) Holders
    
    
    9(c) Dividends
    
    
    9(d) Securities Authorized for Issuance Under Equity
Compensation Plan
    
    
    9Item 6. Plan of Operations
    
    
    9Item 7. Financial Statements
    
    
    11Item 8. Changes in and Disagreements with
Accountants on Accounting and Financial Disclosure.
    
    
    12Item 8A Controls and Procedures
    
    
    12PART III
    
    
    12Item 9. Directors, Executive Officers, Promoters and Control
Persons
    
    
    12Item 10. Executive Compensation
    
    
    13Item 11. Security Ownership of Certain Beneficial Owners and
Management
    
    
    14Item 12. Certain Relationships and Related Transactions
    
    
    15Item 13. Exhibits and Reports on Form 8-K
    
    
    15Item 14. Principal Accountant Fees and Services
    
    
    15INDEX TO EXHIBITS
    
    
    17Certification of Chief Executive Officer Pursuant to Section 302Certification of Chief Financial Officer Pursuant to Section 302Certification of Chief Executive Officer Pursuant to Section 906Certification of Chief Financial Officer Pursuant to Section 906
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/s/ Clyde BaileyClyde BaileyCertified Public Accountant
 
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A S S E T SCurrent AssetsCash
    
    $
    2,691Total Current Assets
    
    
    
    
    
    
    2,691Total Assets
    
    
    
    
    
    $
    2,691L I A B I L I T I E SCurrent LiabilitiesAccounts Payable and accrued expenses
    
    
    125,413Total Liabilities
    
    
    
    
    
    
    125,413Commitments and Contingencies
    
    
    
    
    
    
    0S T O C K H O L D E R S  E Q U I T YPreferred Stock, par value $.10 per share
    
    
    60,000authorized shares 1,000,000 shares, 600,000 shares outstanding
Common Stock
    
    
    271,950Additional Paid-in-Capital
    
    
    9,456,612Accumulated Deficit
    
    
    (9,911,284
    )Total Stockholders Equity (Deficit)
    
    
    
    
    
    
    (122,722
    )Total Liabilities and Stockholders Equity
    
    
    
    
    
    $
    2,691
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For the Twelve Months EndedSeptember 30
    
    
    September 30REVENUES:
    
    2004
    
    
    2003Revenues
    
    $
    97,674
    
    
    $
    237,788Total Revenues
    
    
    97,674
    
    
    
    237,788COST OF REVENUESTelephone Services
    
    $
    75,102
    
    
    $
    179,923GROSS PROFIT
    
    $
    22,572
    
    
    $
    57,865EXPENSES:Legal and Professional Services
    
    
    17,271
    
    
    
    90,948Advertising
    
    
    
    
    
    
    14,250Impairment Loss
    
    
    319,308
    
    
    
    484,526Depreciation
    
    
    4,026
    
    
    
    8,051Consulting
    
    
    19,420
    
    
    
    154,000Salaries, Wages, and Transfer Agent Fees
    
    
    96,422
    
    
    
    117,676Other Selling, general & administrative expenses
    
    
    35,498
    
    
    
    107,112Total Expenses
    
    
    491,945
    
    
    
    976,563Operating Income
    
    
    (491,945
    )
    
    
    (918,698
    )OTHER INCOME (EXPENSES)Interest Income
    
    
    
    
    
    
    0Effect of Subsidiarys Stock Dividend
    
    
    
    
    
    
    Other Income (expenses)
    
    
    
    
    
    
    773Loss from Continuing Operations
    
    $
    (491,945
    )
    
    $
    (917,925
    )DISCONINUED OPERATIONS:Discontinued Operations
    
    $
    (61,076
    )
    
    $
    Net Loss
    
    $
    (553,021
    )
    
    $
    (917,925
    )Basic and Diluted Earnings Per Common Share
    
    
    (0.03
    )
    
    
    (0.07
    )Weighted Average number of Common Shares
used in per share calculations
    
    
    15,556,712
    
    
    
    12,520,582
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Additional
    
    
    
    
    
    
    TotalCommon Stock
    
    
    Preferred Stock
    
    
    Paid-In
    
    
    Accumulated
    
    
    StockholdersShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    EquityBalance September 30, 2002
    
    
    39,330,585

    
#

    656,820
    
    
    
    
    
    
    
    
    
    
    
    8,780,662

    
#

    (8,440,338)

    
#

    997,144Conversion of Common to
Preferred Stock
    
    
    (30,000,000
    )
    
    
    (501,000
    )
    
    
    600,000
    
    
    
    60,000
    
    
    
    441,000
    
    
    
    
    
    
    
    Stock Issued for Consulting
    
    
    1,540,000
    
    
    
    25,718
    
    
    
    
    
    
    
    
    
    
    
    128,282
    
    
    
    
    
    
    
    154,000Stock Issued for Legal Services
    
    
    64,657
    
    
    
    1,080
    
    
    
    
    
    
    
    
    
    
    
    63,577
    
    
    
    
    
    
    
    64,657Stock Sold for Cash
    
    
    2,436,000
    
    
    
    40,681
    
    
    
    
    
    
    
    
    
    
    
    20,562
    
    
    
    
    
    
    
    61,243Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    -(917,925
    )
    
    
    (917,925
    )Balance September 30, 2003
    
    
    13,371,242
    
    
    
    223,299
    
    
    
    600,000
    
    
    
    60,000
    
    
    
    9,434,083
    
    
    
    (9,358,263
    )
    #
    
    359,119Stock Issued for Consulting
    
    
    25,000
    
    
    
    419
    
    
    
    
    
    
    
    
    
    
    
    2,082
    
    
    
    
    
    
    
    2,501Stock Sold for Cash
    
    
    2,888,181
    
    
    
    48,233
    
    
    
    
    
    
    
    
    
    
    
    20,447
    
    
    
    
    
    
    
    68,680Net Loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (553,021
    )
    
    
    (553,021
    )Balance September 30, 2004
    
    
    16,284,423
    
    
    
    271,950
    
    
    
    600,000
    
    
    
    60,000
    
    
    
    9,456,612
    
    
    
    (9,911,284
    )
    
    
    (122,722
    )
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Twelve Months EndedSeptember 30
    
    
    September2004
    
    
    2003CASH FLOWS FROM OPERATING ACTIVITIES:Net Income (Loss)
    
    $
    (553,021
    )
    
    $
    (917,925
    )Adjustments to reconcile net income (loss) to
net cash provided(used) to operating activities:Depreciation
    
    
    4,026
    
    
    
    8,051Stock Issued to Consultants
    
    
    2,502
    
    
    
    154,000Stock Issued for Legal Services
    
    
    
    
    
    
    64,657Discontinued Operations
    
    
    83,648Impairment Loss
    
    
    319,308
    
    
    
    484,526Effect of Subsidiarys Stock Dividend
    
    
    
    
    
    
    Accounts Receivable
    
    
    
    
    
    
    14,281Accounts Payable and accrued expenses
    
    
    (4,576
    )
    
    
    98,831Total Adjustments
    
    
    404,908
    
    
    
    824,346Net Cash provided (used) in Operating Activities
    
    $
    (148,113
    )
    
    $
    (93,579
    )Cash Flows from Investing Activities:Notes Receivable:Advances
    
    
    
    
    
    
    Collections
    
    
    
    
    
    
    0Acquisition
    
    
    
    
    
    
    Net Cash provided (used) in Investing Activities
    
    $
    
    
    
    $
    Cash Flows from Financing Activities:Common Stock
    
    
    89,553
    
    
    
    89,553Note Payable
    
    
    32,500
    
    
    
    32,500Net Cash provided (used) by Financing Activities
    
    $
    122,053
    
    
    $
    122,053Net Increase (Decrease) in Cash
    
    $
    (26,060
    )
    
    $
    28,474Cash Balance, Beginning of Period
    
    
    28,751
    
    
    
    277Cash Balance, End of Period
    
    $
    2,691
    
    
    $
    28,751Supplemental cashflow informaiton:Cash Paid for interest
    
    $
    
    
    
    $
    Cash Paid for income taxes
    
    $
    
    
    
    $
    
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Current Assets
    
    $
    20,582Fixed Assets
    
    
    35,000Goodwill
    
    
    721,116Licenses
    
    
    525,000Debt Assumed
    
    
    (415,803
    )Net Assets Acquired
    
    $
    885,895
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Date FirstName
    
    Age
    
    Elected
    
    Term
    

PositionWilliam R. Miertschin
    
    
    56
    
    
    
    1997
    
    
    1 year
    
    President, CEO & DirectorKatey J. Daniel
    
    
    30
    
    
    
    2003
    
    
    1 year
    
    Secretary & DirectorArthur R. Berger
    
    
    74
    
    
    
    2003
    
    
    1 year
    
    CFOAmber G. Smith
    
    
    39
    
    
    
    2002
    
    
    1 year
    
    TreasurerRichard M. Hewitt
    
    
    66
    
    
    
    2002
    
    
    1 year
    
    Director
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AnnualName
    
    Position
    
    CompensationWilliam Miertschin
    
    President & CEO
    
    $
    30,000Katey Daniel
    
    Secretary
    
    $
    12,000Arthur R. Berger
    
    CFO
    
    $
    30,000Amber Smith
    
    Treasurer
    
    $
    6,000
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Name and Address
    
    Number of
    
    PercentTitle of Class
    
    of Beneficial Owner
    
    Shares Owned
    
    of ClassCommon Stock
    
    Connect Holding Corp.
    
    
    330,000
    *
    
    
    2.026$0.0167 Par Value
    
    1133 Empire DriveDallas, Texas 75247Common Stock
    
    Sammy Dog, Ltd.
    
    
    330,000
    **
    
    
    2.026$0.0167 Par Value
    
    400 North Bailey Ave.Fort Worth, Texas 76107Common Stock
    
    Ivan Webb
    
    
    1,481,085
    
    
    
    9.095$0.0167 Par Value
    
    901 West 6th StreetCisco, Texas 76437Common Stock
    
    John Davis
    
    
    1,828,181
    
    
    
    11.226$0.0167 Par Value
    
    Hillandale, Seaway LaneTorquay, DevonUnited Kingdom TQ2 6PN
 
 *
    
    Connect Holding Corp. has 250,000 shares of preferred stock, which has voting rights equal to
12,500,000 shares of common stock.**
    
    Sammy Dog, Ltd. has 250,000 shares of preferred stock, which has voting rights equal to
12,500,000 shares of common stock.  Common Stock
    
    William R. Miertschin
    
    
    314,163
    *
    
    
    1.929$0.0167 Par Value
    
    7738 Forest Lane #102Dallas, Texas 75230Common Stock
    
    Katey Daniel
    
    
    65,000
    
    
    
    .399$0.0167 Par Value
    
    4202 Zion Hill RoadWeatherford, Texas 76088Common Stock
    
    Amber G. Smith
    
    
    152,800
    
    
    
    .938$0.0167 Par Value
    
    6867 Anglebluff CircleDallas, Texas 75248
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Common Stock
    
    Richard M. Hewitt
    
    
    397,242
    **
    
    
    2.439$0.0167 Par Value
    
    202 Fresh Meadow DriveTrophy Club, Texas 76262Common Stock
    
    Arthur R. Berger
    
    
    300,000
    
    
    
    1.843$0.0167 Par Value
    
    3813 Hilwood WayBedford, Texas 76021All Directors and Officers as a group (4 persons)
    
    
    1,229,205
    
    
    
    7.548
 
 *
    
    William R. Miertchin has 80,000 shares of preferred stock, which has voting rights equal to
4,000,000 shares of common stock.**
    
    Richard M. Hewitt has 20,000 shares of preferred stock, which has voting rights equal to
1,000,000 shares of common stock.   
    
   
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LOCAL TELECOM SYSTEMS, INC.Date: January 14, 2004
    
    /s/ William R. MiertschinBy: William R. Miertschin,President & Chief Executive OfficerDate: January 14, 2004
    
    /s/ Arthur R. BergerBy: Arthur R. Berger, CFO
  Signature
    
    Title
    
    Date/s/ Katey Daniel
    
    Secretary & Director
    
    January 14, 2004Katey Daniel/s/ William R. Miertschin
    
    President, CEO & Director
    
    January 14, 2004William R. Miertschin/s/ Richard M. Hewitt
    
    Director
    
    January 14, 2004Richard M. Hewitt
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EXHIBT NO.
    
    PAGE NO.
    

DESCRIPTION3(i)
    
    
    *
    
    
    Articles of Incorporation3(ii)
    
    
    *
    
    
    Bylaws31(i)
    
    
    17
    
    
    302 Certification of Chief Executive Officer31(ii)
    
    
    18
    
    
    302 Certification of Chief Financial Officer32(i)
    
    
    19
    
    
    906 Certification of Chief Executive Officer32(ii)
    
    
    20
    
    
    906 Certification of Chief Financial Officer
 
 *
    
    Previously filed as indicated and incorporated herein by reference from the referenced filings
previously made by the Company. 17