Exhibit:
      10.5

     

    PROMISSORY
      NOTE

    


    October
      31, 2007

    


    
      	 	
              $200,000.00

            


    

    


    FOR
      VALUE RECEIVED,
      the
      undersigned, ATSI
      COMMUNICATIONS, INC.,
      a
      Nevada corporation (the “Company”),
      promises to pay CCA
      FINANCIAL SERVICES
      (the
“Lender”)
      at
      P.O. Box 16298, Sugar Land, TX 77496 or other address as the Lender shall
      specify in writing, the principal sum of Two
      Hundred Thousand Dollars ($200,000) and
      interest at the annual rate of fifteen percent (15%) on the unpaid balance
      pursuant to the following terms of this Promissory Note (the “Note”):
      

     

    1. Principal
      and Interest.
      For
      value
      received, the Company hereby promises to pay to the order of the Lender on
      the
      6-month anniversary of the date hereof (“Maturity
      Date”)
      in
      lawful money of the United States of America and in immediately available funds
      the principal sum of Two Hundred Thousand Dollars ($200,000), together with
      interest on the unpaid principal of this note at the rate of fifteen
      percent (15%) per year (computed on the basis of a 365-day year and the
      actual days elapsed) from the date of this Note until paid. 

    


    2. Monthly
      Principal and Interest Payments.
      The
      Company shall make monthly payments of principal and interest in accordance
      with
the
      payment schedule attached hereto as Exhibit A (the “Payment
      Schedule”).
      Each
      payment shall be due and payable as of the Payment Due Date set forth on the
      Payment Schedule and all payment amounts shall be first applied to interest
      and
      the balance to principal. There shall be no prepayment fee or penalty.


    


    3. Right
      of Prepayment.
      Notwithstanding the payments pursuant to Section 2, the Company at its option
      shall have the right to prepay, with three (3) business days advance written
      notice, any additional amounts of outstanding principal of the Note without
      penalty. 

    


    4. Waiver
      and Consent.
      To the
      fullest extent permitted by law and except as otherwise provided herein, the
      Company waives demand, presentment, protest, notice of dishonor, suit against
      or
      joinder of any other person, and all other requirements necessary to charge
      or
      hold the Company liable with respect to this Note.

    


    5. Costs,
      Indemnities and Expenses.
      In the
      event of default as described herein, the Company agrees to pay all reasonable
      fees and costs incurred by the Lender in collecting or securing or attempting
      to
      collect or secure this Note, including reasonable attorneys’ fees and expenses,
      whether or not involving litigation, collecting upon any judgments and/or
      appellate or bankruptcy proceedings. The Company agrees to pay any documentary
      stamp taxes, intangible taxes or other taxes which may now or hereafter apply
      to
      this Note or any payment made in respect of this Note, and the Company agrees
      to
      indemnify and hold the Lender harmless from and against any liability, costs,
      attorneys’ fees, penalties, interest or expenses relating to any such taxes, as
      and when the same may be incurred.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    6. Secured
      Nature of the Note.
      This
      Note is secured by the Security Agreement of even date herewith between the
      Company and the Lender (the “Security
      Agreement”)
      (collectively this Note, the Security Agreement, and any other related
      agreements entered into between the Company and the Lender are collectively
      referred to herein as the “Transaction
      Documents”).
      

    


    7. Event
      of Default.
      An
“Event
      of Default”
shall
      be deemed to have occurred upon the occurrence of any of the following:


    


    (i) The
      Company should fail for any reason or for no reason to make any payment of
      the
      principal of, interest on or other charges in respect of this Note, within
      ten
      (10) days of the date the same shall become due and payable (whether on an
      installment date or the Maturity Date or by acceleration or
      otherwise);

    


    (ii) The
      Company shall fail to observe or perform any other covenant, agreement or
      warranty contained in, or otherwise commit any breach or default of any
      provision of this Note, or any of the other Transaction Documents, which is
      not
      cured within fifteen (15) days after the time of breach;

    


    (iii) The
      Company or any subsidiary that is controlled by the Company shall commence,
      or
      there shall be commenced against the Company or any subsidiary controlled by
      the
      Company under any applicable bankruptcy or insolvency laws as now or hereafter
      in effect or any successor thereto, or the Company or any subsidiary controlled
      by the Company commences any other proceeding under any reorganization,
      arrangement, adjustment of debt, relief of debtors, dissolution, insolvency
      or
      liquidation or similar law of any jurisdiction whether now or hereafter in
      effect relating to the Company or any subsidiary controlled by the Company
      or
      there is commenced against the Company or any subsidiary controlled by the
      Company any such bankruptcy, insolvency or other proceeding which remains
      undismissed for a period of 61 days; or the Company or any subsidiary controlled
      by the Company is adjudicated insolvent or bankrupt; or any order of relief
      or
      other order approving any such case or proceeding is entered; or the Company
      or
      any subsidiary of the Company suffers any appointment of any custodian, private
      or court appointed receiver or the like for it or any substantial part of its
      property which continues undischarged or unstayed for a period of sixty one
      (61)
      days; or the Company or any subsidiary controlled by the Company makes a general
      assignment for the benefit of creditors; or the Company or any subsidiary
      controlled by the Company shall fail to pay, or shall state that it is unable
      to
      pay, or shall be unable to pay, its debts generally as they become due; or
      the
      Company or any subsidiary controlled by the Company shall by any act or failure
      to act expressly indicate its consent to, approval of or acquiescence in any
      of
      the foregoing; or any corporate or other action is taken by the Company or
      any
      subsidiary controlled by the Company for the purpose of effecting any of the
      foregoing; provided however, that the no such action relating to or affecting
      ATSI Communications, Inc., a Texas corporation, or Telespan, Inc., a Texas
      corporation) shall be considered an Event of Default hereunder; and

    


    (iv) The
      Company or any subsidiary controlled by the Company shall default in any of
      its
      obligations under any other promissory note, or any mortgage, credit agreement
      or other facility, indenture agreement, factoring agreement or other instrument
      under which there may be issued, or by which there may be secured or evidenced
      any indebtedness for borrowed money or money due under any long term leasing
      or
      factoring arrangement of the Company or any subsidiary controlled by the Company
      in an amount exceeding $200,000, whether such indebtedness now exists or shall
      hereafter be created and such default shall result in such indebtedness becoming
      or being declared due and payable prior to the date on which it would otherwise
      become due and payable; and

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    (v) The
      Common Stock shall cease to be quoted for trading or listed for trading on
      the
      OTC Bulletin Board (“OTC”),
      Nasdaq SmallCap Market, New York Stock Exchange, American Stock Exchange or
      the
      Nasdaq National Market and shall not again be quoted or listed for trading
      thereon within five (5) Trading Days of such delisting.

    


    8. Remedies. Upon
      an
      Event of Default (as defined above), the entire principal balance and accrued
      interest outstanding under this Note, and all other obligations of the Company
      under this Note, shall be immediately due and payable without any action on
      the
      part of the Lender; interest shall accrue on the unpaid principal balance at
      twenty four percent (24%) per year or the highest rate permitted by applicable
      law, if lower; and the Lender shall be entitled to seek and institute any and
      all remedies available to it. Furthermore, anytime after the occurrence of
      an
      Event of Default the Lender from time to time may convert the outstanding
      amounts owed under this Note into shares of Common Stock (the “Conversion
      Shares”)
      at a
      conversion price equal to the lesser of (a) the fixed price - one hundred twenty
      percent (120%) of the Closing Bid Price as quoted by Bloomberg, LP on the date
      of this Note, or (b) eighty percent (80%) of the lowest Closing Bid Price of
      the
      Common Stock as quoted by Bloomberg, LP during the five (5) trading days
      immediately preceding the date of such conversion. However, in no event, shall
      the number of shares issued exceed seventy-five million (75,000,000) shares.
      In
      order to convert, the Lender shall send a notice of conversion in the form
      attached hereto as Exhibit B (“Conversion
      Notice”)
      to the
      Company and to the Company’s transfer agent, and the Company shall, or cause its
      transfer agent to, deliver to the Lender the Conversion Shares in an amount
      equal to the outstanding amount of this Note being converted divided by the
      applicable conversion price as set forth on the Conversion Notice within three
      (3) Trading Days receipt of such Conversion Notice. 

    


    9. Maximum
      Interest Rate.
      In no
      event shall any agreed to or actual interest charged, reserved or taken by
      the
      Lender as consideration for this Note exceed the limits imposed by New Jersey
      law. In the event that the interest provisions of this Note shall result at
      any
      time or for any reason in an effective rate of interest that exceeds the maximum
      interest rate permitted by applicable law, then without further agreement or
      notice the obligation to be fulfilled shall be automatically reduced to such
      limit and all sums received by the Lender in excess of those lawfully
      collectible as interest shall be applied against the principal of this Note
      immediately upon the Lender’s receipt thereof, with the same force and effect as
      though the Company had specifically designated such extra sums to be so applied
      to principal and the Lender had agreed to accept such extra payment(s) as a
      premium-free prepayment or prepayments.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    10. Representations,
      Warranties, and Covenants of the Company.
      

    


    
      	 	
              (a)

            	
              Organization
                and Qualification.
                The Company and its subsidiaries are corporations duly organized
                and
                validly existing in good standing under the laws of the jurisdiction
                in
                which they are incorporated, and have the requisite corporate power
                to own
                their properties and to carry on their business as now being conducted.
                Each of the Company and its subsidiaries is duly qualified as a foreign
                corporation to do business and is in good standing in every jurisdiction
                in which the nature of the business conducted by it makes such
                qualification necessary, except to the extent that the failure to
                be so
                qualified or be in good standing would not have a material adverse
                effect
                on the Company and its subsidiaries taken as a
                whole.

            


    

     

    
      	 	
              (b)

            	
              Authorization,
                Enforcement, Compliance with Other Instruments.
                (i) The Company has the requisite corporate power and authority to
                enter into and perform this Note and the other Transaction Documents
                and
                to issue the Conversion Shares upon an Event of Default in accordance
                with
                the terms hereof and thereof, (ii) the execution and delivery of
                the
                Transaction Documents by the Company and the consummation by it of
                the
                transactions contemplated hereby and thereby, including, without
                limitation, the issuance of the Note and the reservation for issuance
                and
                the issuance of the Conversion Shares issuable upon conversion, have
                been
                duly authorized by the Company’s Board of Directors and no further consent
                or authorization is required by the Company, its Board of Directors
                or its
                stockholders, (iii) the Transaction Documents have been duly executed
                and
                delivered by the Company, (iv) the Transaction Documents constitute
                the
                valid and binding obligations of the Company enforceable against
                the
                Company in accordance with their terms, except as such enforceability
                may
                be limited by general principles of equity or applicable bankruptcy,
                insolvency, reorganization, moratorium, liquidation or similar laws
                relating to, or affecting generally, the enforcement of creditors’ rights
                and remedies. 

            


    

    


    
      	 	
              (c)

            	
              The
                authorized capital stock of the Company consists of 150,000,000 shares
                of
                Common Stock, $.001 par value per share (“Common
                Stock”),
                50,000 shares of Series A Preferred Stock, $.001 par value per share
                (the
                “Series
                A Preferred”),
                3,000 shares of Series D Preferred Stock, $.001 par value per share
                (the
                “Series
                D Preferred”),
                10,000 shares of Series E Preferred Stock, $.001 par value per share
                (the
                “Series
                E Preferred”),
                and 16,000,000 shares of Series H Preferred Stock, par value $0.001
                per
                share (the “Series
                H Preferred”)
                of which 39,128,493
                shares
                of Common Stock and 742 shares of Series D Preferred are issued and
                outstanding. All of such outstanding shares have been validly issued
                and
                are fully paid and nonassessable.

            


    

    


    
      	 	
              (d)

            	
              Reporting
                Status.
                Until the earlier of (i) the date as of which the Lender may sell
                all of
                the Conversion Shares without restriction pursuant to Rule 144(k)
                promulgated under the Securities Act of 1933, as amended (or successor
                thereto), or (ii) the date on which (A) the Lender shall have sold
                all the
                Conversion Shares and (B) none of the Note remains outstanding, the
                Company shall file in a timely manner all reports required to be
                filed
                with the SEC pursuant to the Securities Exchange Act of 1934, as
                amended
                (the “Exchange Act”), and the regulations of the Securities and Exchange
                Commission thereunder, and the Company shall not terminate its status
                as
                an issuer required to file reports under the Exchange Act even if
                the
                Exchange Act or the rules and regulations thereunder would otherwise
                permit such termination.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (e)

            	
              Listings
                or Quotation.
                The Company’s Common Stock shall be listed or quoted for trading on any of
                (a) the American Stock Exchange, (b) New York Stock Exchange, (c)
                the
                Nasdaq National Market, (d) the Nasdaq Capital Market, or (e) the
                OTC
                Bulletin Board (“OTC”)
                (each, a “Primary
                Market”)
                and if issued, the Company shall promptly secure the listing or quotation
                of the Conversion Shares for trading on the same Primary Market upon
                which
                the shares of Common Stock are then listed or
                quoted.

            


    

    


    
      	 	
              (f)

            	
              Each
                of the Company and the Lender shall pay all costs and expenses incurred
                by
                such party in connection with the negotiation, investigation, preparation,
                execution and delivery of the Transaction
                Documents.

            


    

    


    
      	 	
              (g)

            	
              Issuance
                of Capital Stock.
                So long as any portion of this Note is outstanding, the Company shall
                not,
                without the prior written consent of the Lender, (i) issue or sell
                shares
                of common stock or preferred stock without consideration or for a
                consideration per share less than 80% of the bid price of the common
                stock
                determined immediately prior to its issuance, (ii) issue any warrant,
                option, right, contract, call, or other security instrument granting
                the
                holder thereof, the right to acquire common stock without consideration
                or
                for a consideration less than 80% of such common stock’s bid price value
                determined immediately prior to its issuance, (iii) enter into any
                security instrument granting the holder a security interest in any
                and all
                assets of the Company, or (iv) file any registration statement on
                Form S-8
                except to register up to 15% of the number of shares outstanding
                to be
                issued to employees, officers, or directors pursuant to a employee
                stock
                option plan approved by the Company’s Board of Directors.

            


    

    


    11. Cancellation
      of Note.
      Upon
      the repayment by the Company of all of its obligations hereunder to the Lender,
      including, without limitation, the principal amount of this Note, plus accrued
      but unpaid interest, the indebtedness evidenced hereby shall be deemed canceled
      and paid in full. Except as otherwise required by law or by the provisions
      of
      this Note, payments received by the Lender hereunder shall be applied first
      against expenses and indemnities, next against interest accrued on this Note,
      and next in reduction of the outstanding principal balance of this
      Note.

    


    12. Severability.
      If any
      provision of this Note is, for any reason, invalid or unenforceable, the
      remaining provisions of this Note will nevertheless be valid and enforceable
      and
      will remain in full force and effect. Any provision of this Note that is held
      invalid or unenforceable by a court of competent jurisdiction will be deemed
      modified to the extent necessary to make it valid and enforceable and as so
      modified will remain in full force and effect.

    


    13. Amendment
      and Waiver.
      This
      Note may be amended, or any provision of this Note may be waived, provided
      that
      any such amendment or waiver will be binding on a party hereto only if such
      amendment or waiver is set forth in a writing executed by the parties hereto.
      The waiver by any such party hereto of a breach of any provision of this Note
      shall not operate or be construed as a waiver of any other breach.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    14. Successors.
      Except
      as otherwise provided herein, this Note shall bind and inure to the benefit
      of
      and be enforceable by the parties hereto and their permitted successors and
      assigns.

    


    15. Assignment.
      This
      Note shall not be directly or indirectly assignable or delegable by the Company.
      The Lender may assign this Note as long as such assignment complies with the
      Securities Act of 1933, as amended.

    


    16. No
      Strict Construction.
      The
      language used in this Note will be deemed to be the language chosen by the
      parties hereto to express their mutual intent, and no rule of strict
      construction will be applied against any party.

    


    17. Further
      Assurances.
      Each
      party hereto will execute all documents and take such other actions as the
      other
      party may reasonably request in order to consummate the transactions provided
      for herein and to accomplish the purposes of this Note.

    


    18. Notices,
      Consents, etc.  Any
      notices, consents, waivers or other communications required or permitted to
      be
      given under the terms hereof must be in writing and will be deemed to have
      been
      delivered: (i) upon receipt, when delivered personally; (ii) upon receipt,
      when
      sent by facsimile (provided confirmation of transmission is mechanically or
      electronically generated and kept on file by the sending party); or (iii) one
      (1) Trading Day after deposit with a nationally recognized overnight delivery
      service, in each case properly addressed to the party to receive the same.
      The
      addresses and facsimile numbers for such communications shall be:

    


    
      	
              If
                to Company:

            	
              ATSI
                Communications, Inc

            
	 	
              3201
                Cherry Ridge Drive, Suite C300

            
	 	
              San
                Antonio, TX 78230

            
	 	
              Attention:

            	
              Arthur
                L. Smith

            
	 	 	
              Chief
                Executive Officer

            
	 	
              Telephone:

            	
              210-614-7240

            
	 	
              Facsimile:

            	
              210-614-7264

            
	 	 	 
	
              With
                a Copy to:

            	
              Franklin,
                Cardwell & Jones

            
	 	
              1001
                McKinney, 18th
                Floor

            
	 	
              Houston,
                Texas 77002

            
	 	
              Attention:

            	
              Lawrence
                E. Wilson

            
	 	
              Telephone:

            	
              (713)
                425-3259

            
	 	
              Facsimile:

            	
              (713)
                222-0938

            
	 	 	 
	
              If
                to the Lender:

            	
              CCA
                Financial Services, Inc.

            
	 	
              P.O.
                Box 16298

            
	 	
              Sugar
                Land, TX 77496

            
	 	
              Attention:

            	
              Frank
                L. Angelo

            
	 	
              Telephone:

            	
              (713)
                202-4609

            
	 	
              Facsimile:

            	
              (281)
                265-5392

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    or
      at
      such other address and/or facsimile number and/or to the attention of such
      other
      person as the recipient party has specified by written notice given to each
      other party three (3) trading days prior to the effectiveness of such change.
      Written confirmation of receipt (A) given by the recipient of such notice,
      consent, waiver or other communication, (B) mechanically or electronically
      generated by the sender's facsimile machine containing the time, date, recipient
      facsimile number and an image of the first page of such transmission or (C)
      provided by a nationally recognized overnight delivery service, shall be
      rebuttable evidence of personal service, receipt by facsimile or receipt from
      a
      nationally recognized overnight delivery service in accordance with clause
      (i),
      (ii) or (iii) above, respectively.

     

    19. Remedies,
      Other Obligations, Breaches and Injunctive Relief.
      The
      Lender’s remedies provided in this Note shall be cumulative and in addition to
      all other remedies available to the Lender under this Note, at law or in equity
      (including a decree of specific performance and/or other injunctive relief),
      no
      remedy of the Lender contained herein shall be deemed a waiver of compliance
      with the provisions giving rise to such remedy and nothing herein shall limit
      the Lender’s right to pursue actual damages for any failure by the Company to
      comply with the terms of this Note. No remedy conferred under this Note upon
      the
      Lender is intended to be exclusive of any other remedy available to the Lender,
      pursuant to the terms of this Note or otherwise. No single or partial exercise
      by the Lender of any right, power or remedy hereunder shall preclude any other
      or further exercise thereof. The failure of the Lender to exercise any right
      or
      remedy under this Note or otherwise, or delay in exercising such right or
      remedy, shall not operate as a waiver thereof. Every right and remedy of the
      Lender under any document executed in connection with this transaction may
      be
      exercised from time to time and as often as may be deemed expedient by the
      Lender. The Company acknowledges that a breach by it of its obligations
      hereunder will cause irreparable harm to the Lender and that the remedy at
      law
      for any such breach may be inadequate. The Company therefore agrees that, in
      the
      event of any such breach or threatened breach, the Lender shall be entitled,
      in
      addition to all other available remedies, to an injunction restraining any
      breach, and specific performance without the necessity of showing economic
      loss
      and without any bond or other security being required. 

    


    20. Governing
      Law; Jurisdiction.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Agreement shall be governed by the internal laws of the State of New
      Jersey without giving effect to any choice of law or conflict of law provision
      or rule (whether of the State of New Jersey or any other jurisdictions) that
      would cause the application of the laws of any jurisdictions other than the
      State of New Jersey. Each party hereby irrevocably submits to the exclusive
      jurisdiction of the Superior Court of the State of New Jersey sitting in Hudson
      County, New Jersey and the United States Federal District Court for the District
      of New Jersey sitting in Newark, New Jersey, for the adjudication of any dispute
      hereunder or in connection herewith or therewith, or with any transaction
      contemplated hereby or discussed herein, and hereby irrevocably waives, and
      agrees not to assert in any suit, action or proceeding, any claim that it is
      not
      personally subject to the jurisdiction of any such court, that such suit, action
      or proceeding is brought in an inconvenient forum or that the venue of such
      suit, action or proceeding is improper. Each party hereby irrevocably waives
      personal service of process and consents to process being served in any such
      suit, action or proceeding by mailing a copy thereof to such party at the
      address for such notices to it under this Agreement and agrees that such service
      shall constitute good and sufficient service of process and notice thereof.
      Nothing contained herein shall be deemed to limit in any way any right to serve
      process in any manner permitted by law.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    21. No
      Inconsistent Agreements.
      None of
      the parties hereto will hereafter enter into any agreement, which is
      inconsistent with the rights granted to the parties in this Note.

    


    22. Third
      Parties.
      Nothing
      herein expressed or implied is intended or shall be construed to confer upon
      or
      give to any person or entity, other than the parties to this Note and their
      respective permitted successor and assigns, any rights or remedies under or
      by
      reason of this Note.

    


    23. Waiver
      of Jury Trial.
      AS A
      MATERIAL INDUCEMENT FOR THE LENDER TO LOAN TO THE COMPANY THE MONIES HEREUNDER,
      THE COMPANY HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
      RELATED IN ANY WAY TO THIS AGREEMENT AND/OR ANY AND ALL OF THE OTHER DOCUMENTS
      ASSOCIATED WITH THIS TRANSACTION.

    


    24. Entire
      Agreement.  This
      Note (including any recitals hereto) set forth the entire understanding of
      the
      parties with respect to the subject matter hereof, and shall not be modified
      or
      affected by any offer, proposal, statement or representation, oral or written,
      made by or for any party in connection with the negotiation of the terms hereof,
      and may be modified only by instruments signed by all of the parties
      hereto.

    


    IN
      WITNESS WHEREOF,
      this
      Promissory Note is executed by the undersigned as of the date
      hereof.

    

      
        	 	
                CCA
                  Financial Services, Inc.

              
	 	 	 
	 	 	 
	 	
                By:

              	
                /s/
                  Frank L. Angelo

              	 
	 	
                Name:
                  Frank
                  L. Angelo

              
	 	 	 
	 	 	 
	 	
                ATSI
                  Communications, Inc.

              
	 	 	 
	 	
                By:

              	
                /s/
                  Arthur L. Smith

              	 
	 	
                Name:
                  Arthur
                  L. Smith

              
	 	
                Title:  
                  President
                  & CEO

              


      

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    


    EXHIBIT
      A

    


    PAYMENT
      SCHEDULE

    


    AMORTIZATION
      SCHEDULE - Normal Amortization

    


    
      	
               

            	 	
              Date

            	 	
              Payment

            	 	
              Interest

            	 	
              Principal

            	 	
              Balance

            	 
	
              Loan

            	 	 	
              10/31/2007

            	 	 	 	 	 	
            	 	 	
            	 	 	
              200,000.00

            	 
	
              1

            	 	 	
              11/30/2007

            	 	 	
              12,614.33

            	 	 	
              2,500.00

            	 	 	
              10,114.33

            	 	 	
              189,885.67

            	 
	
              2

            	 	 	
              12/31/2007

            	 	 	
              12,614.33

            	 	 	
              2,373.57

            	 	 	
              10,240.76

            	 	 	
              179,644.91

            	 
	
              2007
                Totals

            	 	 	 	 	 	
              25,228.66

            	 	 	 4,873.57	 	 	
              20,355.09

            	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              3

            	 	 	
              1/31/2008

            	 	 	
              12,614.33

            	 	 	
              2,245.56

            	 	 	
              10,368.77

            	 	 	
              169,276.14

            	 
	
              4

            	 	 	
              2/29/2008

            	 	 	
              12,614.33

            	 	 	
              2,115.95

            	 	 	
              10,498.38

            	 	 	
              158,777.76

            	 
	
              5

            	 	 	
              3/31/2008

            	
               

            	 	
              12,614.33

            	 	 	
              1,984.72

            	 	 	
              10,629.61

            	 	 	
              148,148.15

            	 
	
              6

            	 	 	
              4/30/2008

            	 	 	
              150,000.00

            	 	 	
              1,851.85

            	 	 	
              148,148.15

            	 	 	
              0.00

            	 
	
              2008
                Totals

            	 	 	 	 	 	
              187,842.99

            	 	 	 8,198.08	 	 	
              179,644.91

            	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Grand
                Totals

            	 	 	 	 	 	
              213,071.65

            	 	 	
              13,071.65

            	 	 	
              200,000.00

            	 	 	 	 


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
      B

     

    CONVERSION
      NOTICE

     

    (To
      be executed by the Lender in order to Convert the Note)

    


    
      	
              TO:
                

            


    

    

      The
        undersigned hereby irrevocably elects to convert
        $_________________________________________ of the principal amount of this
        Note
        into shares of Common Stock of ATSI
        Communications, Inc.,
        according to the conditions stated therein, as of the Date written
        below.

    

     

    
      	
              Conversion
                Date:

            	 
	
              Amount
                to be converted:

            	
              $ 

            
	
              Conversion
                Price:

            	
              $

            
	
              Number
                of shares of Common Stock to be issued:

            	 
	
              Amount
                of Note Unconverted:

            	
              $

            


    

     

    
      	
              Please
                issue the shares of Common Stock in the following name and to the
                following address:

            
	 
	
              Issue
                to:

            	 
	
              Authorized
                Signature:

            	 
	
              Name:

            	 
	
              Title:

            	 
	
              Broker
                DTC Participant Code:

            	 
	
              Account
                Number:

            	 


    

    


    
      
        
        

      

      
        10