UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended March 31, 2010
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ____________ to ____________
Commission file number: 001-32521
XFONE, INC.
(Exact name of registrant as specified in its charter)
Nevada | 11-3618510 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
5307 W. Loop 289
Lubbock, Texas 79414
(Address of principal executive offices)
806-771-5212
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer,, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer o
Non-accelerated filer o Smaller reporting company x
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of May 14, 2010, 21,119,488 shares of the Company’s common stock, $0.001 par value, were issued and outstanding
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XFONE, INC. AND SUBSIDIARIES
Index
Page | |
PART I: FINANCIAL INFORMATION | |
3 | |
22 | |
31 | |
31 | |
PART II: OTHER INFORMATION | |
32 | |
32 | |
32 | |
32 | |
32 | |
32 | |
33 | |
39 |
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PART I:
FINANCIAL INFORMATION
Item 1: | Condensed Consolidated Financial Statements and Notes (Unaudited) - Period Ended March 31, 2010 |
Xfone, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) |
March 31, 2010 |
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CONTENTS | PAGE |
5 | |
7 | |
8 | |
10 |
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Xfone, Inc. and Subsidiaries | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
Unaudited | ||||||||
CURRENT ASSETS: | ||||||||
Cash | $ | 7,000,436 | $ | 2,467,028 | ||||
Accounts receivable, net | 2,414,936 | 2,855,136 | ||||||
Prepaid expenses and other receivables | 2,254,330 | 2,423,402 | ||||||
Deferred taxes | 413,691 | 569,152 | ||||||
Inventory | 197,498 | 199,392 | ||||||
Total current assets | 12,280,891 | 8,514,110 | ||||||
BONDS ISSUANCE COSTS , NET | 1,650,108 | 1,725,705 | ||||||
OTHER LONG TERM ASSETS | 1,222,680 | 929,417 | ||||||
FIXED ASSETS, NET | 53,557,590 | 51,546,695 | ||||||
OTHER ASSETS, NET | 1,723,942 | 1,932,771 | ||||||
ASSETS OF DISCONTINUED OPERATIONS IN THE UNITED KINGDOM | 8,475,755 | 9,652,008 | ||||||
ASSETS OF DISCONTINUED OPERATIONS IN ISRAEL | 4,266,937 | 4,174,576 | ||||||
Total assets | $ | 83,177,903 | $ | 78,475,282 | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Xfone, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED BALANCE SHEETS |
March 31, | December 31, | |||||||
2010 | 2009 | |||||||
Unaudited | ||||||||
CURRENT LIABILITIES: | ||||||||
Short-term bank credit and current maturities of notes payable | $ | 6,626,959 | $ | 7,029,842 | ||||
Trade payables | 7,920,835 | 7,120,474 | ||||||
Other liabilities and accrued expenses | 3,459,025 | 3,922,741 | ||||||
Current maturities of obligations under capital leases | 225,737 | 253,634 | ||||||
Current maturities of bonds | 4,072,855 | 3,637,146 | ||||||
Total current liabilities | 22,305,411 | 21,963,837 | ||||||
DEFERRED TAXES, NET | 3,202,055 | 3,733,929 | ||||||
NOTES PAYABLE FROM THE UNITED STATES DEPARTMENT OF AGRICULTURE, NET OF CURRENT MATURITIES | 5,208,981 | 5,311,032 | ||||||
NOTES PAYABLE, NET OF CURRENT MATURITIES | 2,639,240 | 43,012 | ||||||
BONDS PAYABLES , NET OF CURRENT MATURITIES | 17,690,919 | 17,510,812 | ||||||
OBLIGATIONS UNDER CAPITAL LEASES , NET OF CURRENT MATURITIES | 198,421 | 256,790 | ||||||
OTHER LONG TERM LIABILITIES | 277,405 | 293,953 | ||||||
SEVERANCE PAY | 54,253 | 50,268 | ||||||
LIABILITIES OF DISCONTINUED OPERATIONS IN THE UNITED KINGDOM | 3,923,779 | 4,304,658 | ||||||
LIABILITIES OF DISCONTINUED OPERATIONS IN ISRAEL | 3,207,571 | 3,324,298 | ||||||
Total liabilities | 58,708,035 | 56,792,589 | ||||||
COMMITMENTS AND CONTINGENT LIABILITIES | ||||||||
SHAREHOLDERS' EQUITY: | ||||||||
Common stock of $0.001 par value: 75,000,000 shares authorized; 21,119,488 and 18,376,075 issued and outstanding at March 31,2010 and December 31, 2009 (Note 5) | 20,670 | 18,376 | ||||||
Additional paid-in capital | 47,779,852 | 43,362,217 | ||||||
Equity on issuance note receivable (Note 5) | (575,000 | ) | - | |||||
Foreign currency translation adjustment | (2,961,619 | ) | (2,860,983 | ) | ||||
Retained earnings | (20,126,839 | ) | (19,072,582 | ) | ||||
Total shareholders' equity | 24,137,064 | 21,447,028 | ||||||
Non – Controlling interest | 332,804 | 235,665 | ||||||
Total equity | 24,469,868 | 21,682,693 | ||||||
Total liabilities and shareholders' equity | $ | 83,177,903 | $ | 78,475,282 |
The accompanying notes are an integral part of these condensed consolidated financial statements
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Xfone, Inc. and Subsidiaries |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATION |
(Unaudited) |
Three Months Ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Revenues | $ | 14,557,438 | $ | 15,650,013 | ||||
Cost of revenues | 7,704,165 | 8,655,816 | ||||||
Gross profit | 6,853,273 | 6,994,197 | ||||||
Operating expenses: | ||||||||
Marketing and selling | 1,107,892 | 1,190,734 | ||||||
General and administrative | 5,432,000 | 5,429,100 | ||||||
Total operating expenses | 6,539,892 | 6,619,834 | ||||||
Operating profit | 313,381 | 374,363 | ||||||
Financing income (expense), net | (1,094,726 | ) | 1,546,032 | |||||
Other expenses | (145,245 | ) | (94,128 | ) | ||||
Income (loss) from continued operations before taxes and non-controlling interest | (926,590 | ) | 1,826,267 | |||||
Income tax benefit | 322,229 | 30,283 | ||||||
Net income (loss) from continued operations | (604,361 | ) | 1,856,550 | |||||
Income (loss) from discontinued operations in the United Kingdom and Israel, before taxes | (259,663 | ) | 508,050 | |||||
Income tax expense on discontinued operations in the United Kingdom and Israel | (93,094 | ) | (26,685 | ) | ||||
Net income (loss) | (957,118 | ) | 2,337,915 | |||||
Less: Net income attributed to non-controlling interest (related to discontinued operations) | (97,139 | ) | (19,554 | ) | ||||
Net income (loss) attributed to shareholders | $ | (1,054,257 | ) | $ | 2,318,361 | |||
Basic and diluted loss per share: | ||||||||
Income (loss) from continued operations | $ | (0.032 | ) | $ | 0.101 | |||
Income from discontinued operations | (0.024 | ) | 0.025 | |||||
Basic and diluted | $ | (0.056 | ) | $ | 0.126 | |||
Basic and diluted weighted average number of shares outstanding: | 18,613,772 | 18,376,075 | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Xfone, Inc. and Subsidiaries | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31 , | ||||||||
2010 | 2009 | |||||||
Cash flow from operating activities: | ||||||||
Net income (loss) | $ | (957,118 | ) | $ | 2,337,915 | |||
Adjustments required to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 1,230,249 | 985,169 | ||||||
Compensation in connection with the issuance of warrants and options | 395,415 | 152,017 | ||||||
Impairment of goodwill of discontinued operations | 800,000 | - | ||||||
Accrued interest and exchange rate changes on outstanding Bonds | 629,312 | (1,836,492 | ) | |||||
Decrease (increase) in account receivables | 878,630 | 780,335 | ||||||
Bad debt provision | (12,895 | ) | 464,506 | |||||
Decrease (increase) in inventories | 1,894 | 7,090 | ||||||
Decrease (increase) in long term receivables | (286,405 | ) | 69,835 | |||||
Decrease (increase) in bonds issuance expenses, net | 75,597 | 10,498 | ||||||
Decrease (increase) in prepaid expenses and other receivables | (146,475 | ) | 154,430 | |||||
Increase (decrease) in trade payables | 955,689 | (1,460,163 | ) | |||||
Increase (decrease) in other liabilities and accrued expenses | (677,870 | ) | (419,581 | ) | ||||
Increase (decrease) in severance pay | (6,985 | ) | 54,411 | |||||
Increase (decrease) in other long term liabilities | (20,888 | ) | (30,687 | ) | ||||
Decrease in deferred tax liabilities | (664,935 | ) | (33,593 | ) | ||||
Net cash provided by operating activities | 2,193,215 | 1,235,690 | ||||||
Cash flow from investing activities: | ||||||||
Investment in short term deposit | - | (87,803 | ) | |||||
Purchase of equipment | (1,058,287 | ) | (1,446,870 | ) | ||||
Purchase of equipment for the project under the United States Department of Agriculture | (1,811,593 | ) | (797,137 | ) | ||||
Net cash used in investing activities | (2,869,880 | ) | (2,331,810 | ) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
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Xfone, Inc. and Subsidiaries | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
March 31 , | ||||||||
2010 | 2009 | |||||||
Cash flow from financing activities: | ||||||||
Repayment of long term loans from banks and others | $ | (133,784 | ) | $ | (678,208 | ) | ||
Repayment of capital lease obligation | (17,809 | ) | (104,305 | ) | ||||
Repayment of long term loans from United States Department of Agriculture | (104,542 | ) | - | |||||
Proceeds from exercise of options | 75,754 | - | ||||||
Proceeds from long term loans | 2,556,240 | - | ||||||
Increase (decrease) in short-term bank credit, net | (966,218 | ) | 546,271 | |||||
Proceeds from long term loans from banks | 407,387 | 190,868 | ||||||
Proceeds from long term loans from the United States Department of Agriculture | - | 1,272,939 | ||||||
Proceeds from issuance of shares and detachable warrants, net of issuance expenses | 3,443,760 | - | ||||||
Net cash provided by (used in) financing activities | 5,260,788 | 1,227,565 | ||||||
Effect of exchange rate changes on cash and cash equivalents | (73,034 | ) | (16,110 | ) | ||||
Net increase (decrease) in cash and cash equivalents | 4,511,089 | 115,335 | ||||||
Cash and cash equivalents at the beginning of the period (*) | 2,819,393 | 3,078,474 | ||||||
Cash and cash equivalents at the end of the period | $ | 7,330,482 | $ | 3,193,809 | ||||
Supplemental disclosure of cash flows activities: | ||||||||
Cash paid for: | ||||||||
Interest | $ | 178,218 | $ | 115,900 | ||||
Taxes | $ | 106,846 | $ | 83,677 | ||||
(*) Cash and cash equivalents as of March 31, 2010 includes $330,046 of cash related to discontinued operations.
The accompanying notes are an integral part of these consolidated financial statements
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 1 - Organization and Nature of Business
A. | Xfone, Inc. ("Xfone" or "the Company") was incorporated in Nevada, U.S.A. in September 2000. The Company is a holding and managing company providing voice, video and data telecommunications services, including: local, long distance and international telephony services; video; prepaid and postpaid calling cards; cellular services; Internet services; messaging services (Email/Fax Broadcast, Email2Fax and Cyber-Number); and reselling opportunities, with operations in the United States, United Kingdom and Israel. Xfone serves customers worldwide. |
Xfone's holdings in subsidiaries as of March 31, 2010 were as follows:
● | NTS Communications, Inc. ("NTS") and its seven wholly owned subsidiaries, NTS Construction Company, Garey M. Wallace Company, Inc., Midcom of Arizona, Inc., Communications Brokers Inc., NTS Telephone Company, LLC, NTS Management Company, LLC and PRIDE Network, Inc. - wholly owned U.S. subsidiary. |
● | Xfone USA, Inc. and its two wholly owned subsidiaries, eXpeTel Communications, Inc. and Gulf Coast Utilities, Inc. (collectively, "Xfone USA") - wholly owned U.S. subsidiary. | |
● | Swiftnet Limited ("Swiftnet") - wholly owned U.K. subsidiary. |
● | Equitalk.co.uk Limited ("Equitalk") - wholly owned U.K. subsidiary. |
● | Auracall Limited ("Auracall") - wholly owned U.K. subsidiary of Swiftnet. |
● | Story Telecom, Inc. and its wholly owned U.K. subsidiary, Story Telecom Limited (collectively, "Story Telecom") - wholly owned U.S. subsidiary. |
● | Xfone 018 Ltd. ("Xfone 018") - majority owned Israeli subsidiary in which Xfone holds a 69% ownership share. |
Note 2 - Significant Accounting Policies
The interim condensed financial statements are prepared in accordance with generally accepted accounting principles in the United States. The significant accounting policies followed in the preparation of the financial statements, applied on a consistent basis, are as follows:
A. | Principles of Consolidation and Basis of Financial Statement Presentation |
The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP") and include the accounts of the Company and its subsidiaries. All significant inter-company balances and transactions have been eliminated in consolidation. Minority interest in the loss of a subsidiary will be recorded according to the respective equity interest of the minority and up to its exposure and/or legal obligation to cover the subsidiary losses in the event that equity is reduced to zero or below.
B. | Foreign Currency Translation |
For operations in local currency environments, assets and liabilities are translated at year-end exchange rates with cumulative translation adjustments included as a component of shareholders’ equity and income and expense items are translated at average foreign exchange rates prevailing during the year. Foreign currency transactions gains and losses are included in the results of operations.
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 2 - Significant Accounting Policies (Cont.)
C. | Accounts Receivable |
Accounts receivable are recorded at net realizable value consisting of the carrying amount less the allowance for uncollectible accounts.
The Company uses the allowance method to account for uncollectible accounts receivable balances. Under the allowance method, estimate of uncollectible customer balances is made using factors such as the credit quality of the customer and the economic conditions in the market. An allowance for doubtful accounts is determined with respect to those amounts that the Company has determined to be doubtful of collection. When an account balance is past due and attempts have been made to collect the receivable through legal or other means the amount is considered uncollectible and is written off against the allowance balance.
Accounts receivable are presented net of an allowance for doubtful accounts of $264,279 and $716,798 at March 31, 2010 and December 31, 2009, respectively.
D. | Other Intangible Assets |
Other intangible assets consist of a license to provide communication services in the United States.
Customer relations related to mergers and acquisitions are amortized over a period between 2-13 years from the date of the purchase.
E. | Earnings Per Share |
Basic earning per share (EPS) is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. For the three months ended March 31, 2010, there were no dilutive shares as all options and warrants were out-of-the-money. For the three months ended March 31, 2010, there were no dilutive shares as the inclusion of in-the-money options and warrants would have been anti-dilutive.
F. | Stock-Based Compensation |
The Company accounts for stock-based compensation in accordance with “FASB ASC 718-10.” Stock-based compensation expense recognized during the period is based on the value of the portion of share-based awards that are ultimately expected to vest during the period. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option pricing model. The fair value of restricted stock is determined based on the number of shares granted and the closing price of the Company’s common stock on the date of grant. Compensation expense for all share-based payment awards is recognized using the straight-line amortization method over the vesting period.
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 2 - Significant Accounting Policies (Cont.)
G. | Reclassification |
As reported in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, subsequent to the year ended December 31, 2009, the Company’s board of directors made a strategic decision to concentrate on its operations in the U.S. As a result of this decision, the Company has decided to discontinue its operations in the U.K. and Israel. The assets, liabilities and results of operations of the U.K. and Israel operations have been classified as discontinued operations for all periods presented (see Note 3). Certain amounts in the 2009 financial statements have been reclassified to conform to the current year presentation. Such reclassifications did not impact the Company's gross profit or net income.
H. | Basis of Presentation |
The interim condensed consolidated financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information, including note disclosures, normally included in financial statements which are prepared in accordance with US GAAP has been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures included are adequate to make the information presented not misleading.
In management’s opinion, the condensed consolidated balance sheet as of March 31, 2010 (unaudited) and December 31, 2009 (audited), the unaudited condensed consolidated statements of operations for the three months ended March 31, 2010 and 2009, and the unaudited condensed consolidated statements of cash flows for the three months ended March 31, 2010 and 2009, contained herein, reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of our financial position, results of operations and cash flows on a basis consistent with that of our prior audited consolidated financial statements. However, the results of operations for the interim periods may not be indicative of results to be expected for the full fiscal year. Therefore these financial statements should be read in co njunction with the audited financial statements and notes thereto and summary of significant accounting policies included in the Company’s Form 10-K for the year ended December 31, 2009.
The Company has evaluated subsequent events occurring through the date on which this Quarterly Report on Form 10-Q was issued.
I. | Income Taxes |
The Company accounts for income taxes under FASB ASC 740-10 (Prior Authoritative Literature: Statement of Financial Accounting Standards (SFAS) No. 109, Accounting for Income Taxes). Deferred tax assets and liabilities are based on the difference between the financial statement and tax basis of assets and liabilities as measured by the enacted tax rates which are anticipated to be in effect when these differences reverse. The deferred tax provision is the result of the net change in the deferred tax assets and liabilities. A valuation allowance is established when it is necessary to reduce deferred tax assets to amounts expected to be realized.
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 2 - Significant Accounting Policies (Cont.)
J. | Derivative Instruments |
Effective January 1, 2009, the Company adopted SFAS No. 161, Disclosures about Derivative Instruments and Hedging Activities— an amendment of FASB Statement No. 133, as codified in ASC 815. ASC 815 requires entities to provide qualitative disclosures about the objectives and strategies for using derivatives, quantitative data about the fair value of any gains and losses on derivative contracts, and details of credit risk related contingent features in their hedged positions. ASC 815 also requires entities to disclose more information about the location and amounts of derivative instruments in financial statements; how derivatives and related hedges are accounted for; and how the hedges affect the entity's financial position, financial performance, and cash flows. The adoption of this new guidance on January 1, 2009 has been incorporated into the notes to the Company's consolidated financial statements.. As of March 31, 2010, the Company does not have open positions.
The amount recorded in financing expenses in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2009 that resulted from the above referenced hedging transactions was $5,374.
K. | Recent Accounting Pronouncements |
1. | Fair Value Measurements and Disclosures. In January 2010, the FASB issued “Fair Value Measurements and Disclosures—Improving Disclosures about Fair Value Measurements” (Accounting Standards Update (ASU) 2010-06), which requires new disclosures and explanations for transfers of financial assets and liabilities between certain levels in the fair value hierarchy. ASU 2010-06 also clarifies that fair value measurement disclosures are required for each class of financial asset and liability, which may be a subset of a caption in the consolidated balance sheets, and those disclosures should include a discussion of inputs and valuation techniques. For financial assets and liabilities subject to lowest-measurements, ASU 2010-06, further requires that we separately present purchases, sales, issuances, and settlements instead of netting these changes. With respect to matters other than lowest-level measurements, we adopted ASU 2010-06 beginning with the quarter ended March 31, 2010 with the remaining disclosure requirements becoming effective for fiscal years and interim periods beginning on or after December 15, 2010 (i.e., the quarter ending March 31, 2011, for us). Adoption of this standard did not have any material impact on the Company's financial statements. |
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 3 – Discontinued operations
1. | Operations in the U.K. |
On January 29, 2010, the Company entered into an agreement (the “Agreement”) with Abraham Keinan, a significant shareholder and Chairman of the Board of the Company (“Keinan”), and AMIT K LTD, a company registered in England & Wales which is wholly owned and controlled by Keinan (“Buyer”), for the sale of Swiftnet, Auracall, Equitalk and Story Telecom (the “UK Subsidiaries”), which Xfone owns (the “Transaction”). Pursuant to the Agreement, the consideration to be paid by Buyer and/or Keinan to Xfone shall be comprised of the following three components:
1. | A release of the Company from the repayment of the loan from Iddo Keinan, the son of Mr. Keinan and an employee of Swiftnet dated December 10, 2009, pursuant to which Iddo Keinan extended to Swiftnet a loan of £860,044 ($1,229,263);. |
2. | A release of the Company from its obligation to Bank Leumi (UK) Plc. for of £150,000 ($226,604), thereby releasing the Company from its obligation to Bank Leumi (UK) Plc.; and |
3. | An annual earn-out payment over the following years beginning on the consummation of the Transaction. The aggregate Earn-Out Payments shall be equal to but shall not exceed $1,858,325 in the aggregate. |
The Company's Board of Directors approved the Agreement. The Closing of the Transaction is subject to approval by the holders of a majority of the Company’s common stock entitled to vote, which shall be obtained at a special meeting of the Company’s shareholders to be held not later than July 31, 2010.
As a result of the Agreement to sell the holdings in the UK Subsidiaries, the assets and liabilities related to UK Subsidiaries have been classified as “held for sale” in the Company’s financial statements in accordance with ASC 360, (formerly SFAS No. 144), Accounting for the Impairment or Disposal of Long-Lived Assets. ASC 360 requires an asset group that is held for sale to be recorded at the lower of its carrying amount or fair value less costs to sell. As a result of classifying our UK subsidiaries as discontinued operations we recorded an impairment of $800,000 related to goodwill impairment.
The assets and liabilities of the discontinued operations in the U.K. are as follows:
March 31, | ||||
2010 | ||||
Cash | $ | 206,935 | ||
Other current assets | 2,454,036 | |||
Fixed assets, net | 881,921 | |||
Goodwill | 4,792,014 | |||
Other assets | 140,849 | |||
Note payable | (1,299,263 | ) | ||
Other current liabilities | (2,624,516 | ) | ||
Net assets | $ | 4,551,976 | ||
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 3 – Discontinued operations (Cont.)
The results of discontinued operations in the U.K. are as follows:
Three months ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Revenues (*) | $ | 3,307,509 | $ | 3,650,540 | ||||
Cost of revenues | 1,354,586 | 1,866,298 | ||||||
Gross profit | 1,952,923 | 1,784,242 | ||||||
Operating expenses: | ||||||||
Marketing and selling | 1,137,067 | 1,116,477 | ||||||
General and administrative | 598,781 | 243,665 | ||||||
Impairment of goodwill | 800,000 | - | ||||||
Total operating expenses | 2,535,848 | 1,360,142 | ||||||
Operating profit (loss) | (582,925 | ) | 424,100 | |||||
Financing expenses, net | (50,185 | ) | (16,638 | ) | ||||
Income (loss) before taxes | (633,110 | ) | 407,462 | |||||
Income tax benefit | - | 2,431 | ||||||
Net income (loss) from discontinued operation in the United Kingdom | $ | (633,110 | ) | $ | 409,893 | |||
(*) Intercompany revenues, for services provided by the discontinued operation in the UK to the discontinued operation in Israel, of $211,734 and $308,268 for the three months ended March 31, 2010 and 2009, respectively, are attributed to the discontinued operations in the UK. The associated costs of these revenues are also attributed to the discontinued operations in the UK.
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 3 – Discontinued operations (Cont.)
2. | Operations in Israel |
On March 2, 2010, a non-binding memorandum of understanding (the “MoU”) was entered into by and among the Company, its 26% minority interest partner (the “Minority Partner”) in Xfone 018 and Carnie Capital for the sale by the Company and the Minority Partner of their aggregate holdings (95%) in Xfone 018 to Carnie Capital. The MoU provides for an all cash transaction. Pursuant to the MoU, the parties have begun a due diligence process at the end of which the parties expect to enter into a definitive agreement. There can be no assurance that the Transaction will be consummated.
As a result of the MoU to sell the holdings in Xfone 018, the assets and liabilities related to Xfone 018 have been classified as “held for sale” in the Company’s financial statements in accordance with ASC 360, (formerly SFAS No. 144), Accounting for the Impairment or Disposal of Long-Lived Assets. ASC 360 requires an asset group that is held for sale to be recorded at the lower of its carrying amount or fair value less costs to sell.
The assets and liabilities of the discontinued operations in Israel are as follows:
March 31, | ||||
2010 | ||||
Cash | $ | 123,111 | ||
Other current assets | 2,226,225 | |||
Fixed assets, net | 1,602,329 | |||
Long-term assets | 49,436 | |||
Other assets | 265,836 | |||
Short-term bank credit and current maturities of notes payable | (548,960 | ) | ||
Other current liabilities | (2,422,013 | ) | ||
Notes payable | (468,852 | ) | ||
Other long-term liability | (100,550 | ) | ||
Net assets | $ | 726,562 | ||
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 3 – Discontinued operations (Cont.)
The results of discontinued operations in Israel are as follows:
Three months ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Revenues (*) | $ | 2,255,401 | $ | 2,173,882 | ||||
Cost of revenues | 1,152,088 | 1,256,343 | ||||||
Gross profit | 1,103,313 | 917,539 | ||||||
Operating expenses: | ||||||||
Marketing and selling | 242,573 | 407,399 | ||||||
General and administrative | 442,754 | 342,230 | ||||||
Total operating expenses | 685,327 | 749,629 | ||||||
Operating profit | 417,986 | 167,910 | ||||||
Financing income (expense), net | (44,539 | ) | (67,322 | ) | ||||
Income before taxes | 373,447 | 100,588 | ||||||
Income tax expense | (93,094 | ) | (29,116 | ) | ||||
Net income | 280,353 | 71,472 | ||||||
Income attributed to non-controlling interest | (97,140 | ) | (19,554 | ) | ||||
Net income (loss) attributed to the Company from discontinued operation in Israel | $ | 183,213 | $ | 51,918 | ||||
(*) Intercompany revenues, for services provided by the discontinued operation in Israel to the discontinued operation in the UK, of $7,563 and $22,344 for the three months ended March 31, 2010 and 2009, respectively, are attributed to the discontinued operations in Israel. The associated costs of these revenues are also attributed to the discontinued operations in Israel.
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 4 – Notes payable
1. | NTS has a $4,000,000 revolving line of credit and loan with a commercial bank. The facility is secured by an assignment of all NTS' trade accounts receivable. The facility bears interest at a rate equivalent to Wall Street Journal Prime, but not less than 6% per annum. The Wall Street Journal Prime rate was 3.25% at March 31, 2010. At March 31, 2010, the total amount advanced was $3,392,690. The amounts and terms of the facility are: |
a. | Revolving credit line of $2,000,000, which matured on April 27, 2010. On the maturity date, the outstanding balance was $1,850,000 which was paid in full by the Company. |
b. | Loan of $2,000,000 repayable in equal monthly installments of $61,212 each. The first installment to commence on June 25, 2009 and the final principal payment is due on May 2010. |
2. | NTS Telephone Company, LLC, a wholly owned subsidiary of NTS has received approval from the Rural Utilities Service (“RUS”), a division of the United States Department of Agriculture, for an $11.8 million, 17-year debt facility to complete a telecommunications overbuild project in Levelland, Texas. The RUS loan is non-recourse to NTS and all other NTS subsidiaries and is a cost-of-money loan, bearing interest at the average rate for 10-year U.S. Treasury obligations. Advances are requested as the construction progresses, and the interest rate is set based upon the prevailing rate at the time of each individual advance. The current average rate is approximately 3.73%. The total aggregate amount of these loans as of March 31, 2010 and December 31, 2009 are $5,469,558 and $5,574,100, respectively. The loans are to be repaid in monthly installments until 2024. |
3. | Long-term loan from Burlingame Equity Investors, LP (“Burlingame”) (See Note 5.2) |
On March 23, 2010, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an existing shareholder, Burlingame Equity Investors, LP (“Burlingame”). As part of the Purchase Agreement, the company issued a senior promissory note in the aggregate principal amount of $3,500,000, maturing on March 22, 2012. Interest accrues at an annual rate of 10% and is payable quarterly. The note has equal liquidation rights with the Company's Series A Bonds issued in Israel on December 13, 2007. The Company evaluated the fair value of each of the three securities that were issued under the Purchase Agreement (i.e., the promissory note, 2,173,913 shares of the Company’s common stock and a warrant to p urchase 950,000 shares of the Company’s common stock) and recorded the promissory note in its fair value of $2,556,240. The difference between the fair value and the principal amount will be expense ratably over the life of the promissory note. |
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 5 - Capital Structure, stock options, warrants
1. | Issuance of options to officers and employees |
On February 15, 2010, the Company granted the following options to officers and employees under the Company’s 2007 Stock Incentive Plan:
(1) The Company's President, Chief Executive Officer and director was granted options to purchase 1,500,000 shares of common stock, fully vested, exercisable at $1.10 per share and expiring five years from the date of grant. Based on the assumption below, the Company estimated that the fair value of the options at $294,386. |
(2) The Company's Chief Financial Officer, was granted options to purchase 400,000 shares of common stock, exercisable at $1.10 per share and expiring seven years from the grant date. The options will vest as to 25% of the underlying shares 12 months from the date of grant. The remaining 75% of the options shall vest in equal quarterly installments after 15 months from the date of grant. In the event of a change of control of the Company, any unvested and outstanding portion of the options shall immediately and fully vest. Based on the assumption below, the Company estimated that the fair value of the options at $107,050. |
(3) An aggregate of 1,372,500 options to purchase shares of common stock were granted to other employees of the Company and its subsidiaries. Each such option is exercisable at $1.10 per share and expires seven years from the date of grant. Of these options, 85,000 options are fully vested on the date of grant, and the remaining 1,287,500 options will vest as to 25% of the underlying shares 12 months from the date of grant, with the remaining 75% of the options vesting in equal quarterly installments after 15 months from the date of grant. Additionally, 125,000 of the options will immediately and fully vest in the event of a change in control of the Company. Based on the assumption below, the Company estimated that the fair value of the options at $367,311. On March 22, 2010, 69,500 of these options were exercised . |
The Company’s aggregate equity-based compensation expense for the three months ended March 31, 2010 and 2009 totaled $395,415 and $152,017, respectively.
The weighted average estimated fair value of employee stock options granted during the three months ended March 31, 2010 was $0.23 per share, using the Black-Scholes option pricing model, with the following weighted average assumptions (annualized percentages):
Three months ended March 31, 2010 | ||||
Volatility | 48.5 % | |||
Risk-free interest rate | 2.76 % | |||
Dividend yield | 0 % | |||
Forfeiture rate | 20 % |
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 5 - Capital Structure, stock options, warrants (Cont.)
2. | Securities Purchase Agreement with Burlingame |
On March 23, 2010, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an existing shareholder, Burlingame Equity Investors, LP (“Burlingame”), for the issuance of the following securities of the Company for an aggregate purchase price of $6,000,000:
(1) A senior promissory note in the aggregate principal amount of $3,500,000, maturing on March 22, 2012. Interest accrues at an annual rate of 10% and is payable quarterly. The note has equal liquidation rights with the Company's Series A Bonds issued in Israel on December 13, 2007. |
(2) 2,173,913 shares of the Company’s common stock at a price of $1.15 per share for a total purchase price of $2,500,000. |
(3) A warrant to purchase 950,000 shares of the Company’s Common Stock, which shall be exercisable at a price of $2.00 per share for a period of 5 years. The number of shares issuable upon exercise of the Warrant, and/or the applicable exercise price, may be proportionately adjusted in the event of a stock dividend, distribution, subdivision, combination, merger, consolidation, sale of assets, spin-off or similar transactions. |
The Company's shareholders' equity already reflects the Company's obligation to issue common stock under the Purchase Agreement.
3. | Subscription Agreement with certain investors affiliated with Gagnon Securities LLC |
On March 23, 2010, the Company entered into a Subscription Agreement with certain investors affiliated with Gagnon Securities LLC, an existing shareholder (collectively, “Gagnon”), for the issuance of 500,000 Common Stock at a purchase price of $1.15 per share for an aggregate purchase price of $575,000.
The proceeds were received on April 1, 2010 and the Company's shareholders' equity already reflects the Company's obligation to issue common stock under the Subscription Agreement.
Note 6 - Geographical segments Information
As of January 1, 2010, the Company has one reporting segment. The Company's operations in the United Kingdom and Israel are reported as discontinued operations (Note 3).
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Xfone, Inc. and Subsidiaries |
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2010 (Unaudited) |
Note 7 – Legal proceedings
1. FCC Enforcement Bureau
On March 6, 2006, the FCC’s Enforcement Bureau initiated an investigation into Telephone Electronic Company’s (“TEC”) compliance with FCC Rules for compensation of payphone service providers. The Enforcement Bureau issued requests for production to TEC, its affiliates and subsidiaries. TEC was a majority shareholder of NTS Communications, Inc. ("NTS") at the time of this investigation, prior to the Company's acquisition of NTS on February 26, 2008. On April 26, 2006, NTS filed its response to the request for production. The FCC has the authority to issue fines for violations of its regulations. NTS believes it is in compliance and will not incur any fine. The investigation is pending.
2. Teresa Leffler vs. Xfone USA
On February 24, 2009, Teresa Leffler, a former employee of Xfone USA, Inc., filed a complaint with the Circuit court of Rankin County, Mississippi, alleging sexual discrimination and sexual harassment by a former employee of Xfone USA, Marshall Wingard, and Xfone USA, that allegedly resulted in injury to her job and reputation, lost wages, mental and physical pain and suffering. Ms. Leffler seeks compensatory damages in the amount of $300,000 and punitive damages in the amount of $300,000. The filing of the complaint follows Ms. Leffler’s receipt of a Notice of Right to Sue (the “Notice”) issued by the U.S. Equal Employment Opportunity Commission (the “EEOC”) on November 21, 2008. The Notice also stated that the EEOC was terminating its processing of the charge. Xfone USA and Mr. Wingard filed their Original Answers on April 15, 2009. Mr. Wingard was dismissed with prejudice from the suit by agreement and stipulation on May 12, 2009. The matter against Xfone USA is pending.
3. Eliezer Tzur et al. vs. 012 Telecom Ltd. et al.
On January 19, 2010, Eliezer Tzur et al. (the “Petitioners”) filed a request to approve a claim as a class action (the “Class Action Request”) against Xfone 018 Ltd. (“Xfone 018”), the Company's 69% owned Israel based subsidiary, and four other Israeli telecom companies, all of which are entities unrelated to the Company(collectively with Xfone 018, the “Defendants”), in the District Court in Petach Tikva, Israel (the “Israeli Court”). The Petitioners’ claim alleges that the Defendants have not fully fulfilled their alleged legal requirement to bear the cost of telephone calls by consumers to the Defendants’ respective technical support numbers. One of the Petitioners seeks damages for the cost such telephone calls allegedly made by him during the 5.5- year period preceding the filing of the Class Action Request, which he assessed at NIS 54.45 (approximately $15). The Class Action Request, to the extent it pertains to Xfone 018, states total damages of NIS 7,500,000 (approximately $2,000,000) which reflects the Petitioners’ estimation of damages caused to all consumers that (pursuant to the Class Action Request) allegedly called Xfone 018’s technical support number during a certain period defined in the Class Action Request. A court hearing with respect to the approval or disapproval of the Class Action Request has been scheduled for September 19, 2010. Xfone 018 intends to vigorously defend the Class Action Request.
Note 8 – Subsequent Events
On May 14, 2010, an agreement (the “Agreement”) was entered into between the Company, the Company’s 26% minority interest partner (the “Minority Partner”) in Xfone 018 and Marathon Telecom Ltd. (“Marathon Telecom”), for the sale by the Company of its 69% interest in Xfone 018, and the sale by the Minority Partner of its 26% interest in Xfone 018 (collectively, the “Holdings”) to Marathon Telecom (the “Transaction”). The entry into the Agreement follows the non-binding memorandum of understanding (the “MoU”) which the parties had entered into on March 2, 2010.
The aggregate purchase price to be paid by Marathon Telecom in exchange for the interests in Xfone 018 is approximately $7,850,000, which represents a price for 100% of the interests in Xfone 018 free of any financial debt. The financial debt of Xfone 018 on the date of the Agreement, excluding debt due to the Company, is approximately $1,100,000. In connection with the Transaction, the Company will be repaid its debt, and will receive 69% of the net proceeds after all other financial debt of Xfone 018 has been paid.
The closing of the Transaction is subject to certain conditions and approvals, including, receipt of the approval of the Minister of Communications in Israel.
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FORWARD-LOOKING STATEMENTS
The information set forth in this Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, including, among others (i) expected changes in the Company's revenues and profitability, (ii) prospective business opportunities and (iii) the Company's strategy for financing its business. Forward-looking statements are statements other than historical information or statements of current condition. Some forward-looking statements may be identified by use of terms such as “believes”, “anticipates ”, “intends” or “expects”. These forward-looking statements relate to the plans, objectives and expectations of the Company for future operations. Although the Company believes that its expectations with respect to the forward-looking statements are based upon reasonable assumptions within the bounds of its knowledge of its business and operations, in light of the risks and uncertainties inherent in all future projections, the inclusion of forward-looking statements in this Quarterly Report should not be regarded as a representation by the Company or any other person that the objectives or plans of the Company will be achieved.
You should read the following discussion and analysis in conjunction with the Condensed Consolidated Financial Statements and Notes attached hereto, and the other financial data appearing elsewhere in this Quarterly Report.
The Company's revenues and results of operations could differ materially from those projected in the forward-looking statements as a result of numerous factors, including, but not limited to, the following: the risk of significant natural disaster, the inability of the Company to insure against certain risks, inflationary and deflationary conditions and cycles, currency exchange rates, changing government regulations domestically and internationally affecting the Company's products and businesses.
OVERVIEW
Xfone, Inc. was incorporated in Nevada, U.S.A. in September 2000. The Company is a holding and managing company providing international voice, video and data communications services with operations in the United States, the United Kingdom and Israel offering a wide range of services, including: local, long distance and international telephony services; video; prepaid and postpaid calling cards; cellular services; Internet services; messaging services (Email/Fax Broadcast, Email2Fax and Cyber-Number); and reselling opportunities. The Company serves customers worldwide.
The Company's principal executive offices are in Lubbock, Texas.
Divestitures
As reported in our Annual Report on Form 10-K for the fiscal year ended December 31, 2009, subsequent to the year ended December 31, 2009, our board of directors made a strategic decision to concentrate on our operations in the U.S. As a result of this decision, we decided to divest our operations in the United Kingdom and Israel. The assets, liabilities and results of operations of the U.K. and Israel operations have been classified as discontinued operations for all periods presented.
Detailed discussions of each of these divestitures follow:
Discontinued operations in the UK. On January 29, 2010, we entered into an agreement (the “Agreement”) with Abraham Keinan, a significant shareholder and Chairman of our Board (“Keinan”), and AMIT K LTD, a company registered in England & Wales which is wholly owned and controlled by Keinan (“Buyer”), for the sale of Swiftnet, Auracall, Equitalk and Story Telecom (the “UK Subsidiaries”), which we owns (the “Transaction”). Pursuant to the Agreement, the consideration to be paid by Buyer and/or Keinan to us shall be comprised of the following three components:
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1. | Our release from the repayment of the loan from Iddo Keinan, the son of Mr. Keinan and an employee of Swiftnet dated December 10, 2009, pursuant to which Iddo Keinan extended to Swiftnet a loan of £860,044 ($1,229,263);. |
2. | Release from our obligation to Bank Leumi (UK) Plc. for of £150,000 ($226,604), thereby releasing us from our obligation to Bank Leumi (UK) Plc.; and |
3. | An annual earn-out payment over the following years beginning on the consummation of the Transaction. The aggregate Earn-Out Payments shall be equal to but shall not exceed $1,858,325 in the aggregate. |
Our Board of Directors approved the Agreement. The Closing of the Transaction is subject to approval by the holders of a majority of our common stock entitled to vote, which shall be obtained at a special meeting of the our shareholders to be held not later than July 31, 2010.
As a result of the Agreement, we determined that it is more likely than not that the operations in the UK would be sold. This determination triggered the need to classify the assets and liabilities related to UK Subsidiaries as “held for sale” in our financial statements. Furthermore, it has also triggered the need to test the $5,592,014 of goodwill related to the operation in the UK. Using an estimate of proceeds to be received upon sale as an indicator of the UK operation’s fair value, we determined that $800,000 of UK operation’s goodwill had become impaired, and was, therefore, written off during the quarter ended March 31, 2010 as a component of discontinued operations in the consolidated statement of operations.
The results of discontinued operations in the UK for the three months ended March 31, 2010 and 2009 are as follows:
Three months ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Revenues (*) | $ | 3,307,509 | $ | 3,650,540 | ||||
Cost of revenues | 1,354,586 | 1,866,298 | ||||||
Gross profit | 1,952,923 | 1,784,242 | ||||||
Operating expenses: | ||||||||
Marketing and selling | 1,137,067 | 1,116,477 | ||||||
General and administrative | 598,781 | 243,665 | ||||||
Impairment of goodwill | 800,000 | - | ||||||
Total operating expenses | 2,535,848 | 1,360,142 | ||||||
Operating profit (loss) | (582,925 | ) | 424,100 | |||||
Financing expenses, net | (50,185 | ) | (16,638 | ) | ||||
Income (loss) before taxes | (633,110 | ) | 407,462 | |||||
Income tax benefit | - | 2,431 | ||||||
Net income (loss) from discontinued operation in the United Kingdom | $ | (633,110 | ) | $ | 409,893 | |||
(*) Intercompany revenues, for services provided by the discontinued operation in the UK to the discontinued operation in Israel, of $211,734 and $308,268 for the three months ended March 31, 2010 and 2009, respectively, are attributed to the discontinued operations in the UK. The associated costs of these revenues are also attributed to the discontinued operations in the UK.
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Discontinued operations in Israel On May 14, 2010, we signed an agreement for the sale of our holding in Xfone 018 to Marathon Telecom. The aggregate purchase price to be paid by Marathon in exchange for the interests in Xfone 018 is approximately $7,850,000, which represents a price for 100% of the interests in Xfone 018 free of any financial debt.
As a result of the Agreement to sell the holdings in Xfone 018, the assets and liabilities related to Xfone 018 have been classified as “held for sale” in our financial statements.
The results of discontinued operations in Israel for the three months ended March 31, 2010 and 2009 are as follows:
Three months ended | ||||||||
March 31, | ||||||||
2010 | 2009 | |||||||
Revenues (*) | $ | 2,255,401 | $ | 2,173,882 | ||||
Cost of revenues | 1,152,088 | 1,256,343 | ||||||
Gross profit | 1,103,313 | 917,539 | ||||||
Operating expenses: | ||||||||
Marketing and selling | 242,573 | 407,399 | ||||||
General and administrative | 442,754 | 342,230 | ||||||
Total operating expenses | 685,327 | 749,629 | ||||||
Operating profit | 417,986 | 167,910 | ||||||
Financing income (expense), net | (44,539 | ) | (67,322 | ) | ||||
Income before taxes | 373,447 | 100,588 | ||||||
Income tax expense | (93,094 | ) | (29,116 | ) | ||||
Net income | 280,353 | 71,472 | ||||||
Income attributed to non-controlling interest | (97,140 | ) | (19,554 | ) | ||||
Net income (loss) attributed to the Company from discontinued operation in Israel | $ | 183,213 | $ | 51,918 | ||||
(*) Intercompany revenues, for services provided by the discontinued operation in Israel to the discontinued operation in the UK, of $7,563 and $22,344 for the three months ended March 31, 2010 and 2009, respectively, are attributed to the discontinued operations in Israel. The associated costs of these revenues are also attributed to the discontinued operations in Israel.
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RESULTS OF OPERATIONS
Financial Information - Percentage of Revenues
Three months ended March 31, | ||||||||
2010 | 2009 | |||||||
Revenues | 100.0 | % | 100.0 | % | ||||
Cost of Revenues | 52.9 | % | 55.3 | % | ||||
Gross Profit | 47.1 | % | 44.7 | % | ||||
Operating Expenses: | ||||||||
Marketing and Selling | 7.6 | % | 7.6 | % | ||||
General and Administrative | 37.3 | % | 34.7 | % | ||||
Total Operating Expenses | 44.9 | % | 42.3 | % | ||||
Income (loss) from continued operations before taxes and non-controlling interest | (6.4) | % | 11.7 | % | ||||
Income (loss) from continued operations | (4.2) | % | 11.9 | % | ||||
Net Income (loss) attributed to shareholders | (7.2) | % | 14.8 | % |
COMPARISON OF THE THREE MONTH PERIODS ENDED MARCH 31, 2010 AND MARCH 31, 2009
Revenues. Revenues for the quarter ended March 31, 2010 decreased 7.0% to $14,557,438 from $15,650,013 for the same period in 2009. The decrease in revenues is a result of a decrease of approximately $900,000 in revenues from other carriers and residential customers. The decrease in revenues was offset by approximately $250,000 in revenues from business and residential customers using our fiber network.
Cost of Revenues. Cost of revenues consists primarily of traffic time purchased from telephone companies and other related charges. Cost of revenues for the quarter ended March 31, 2010 decreased 11.0% to $7,704,165 from $8,655,816 for the same period in 2009. Cost of revenues, as a percentage of revenues in the quarter ended March 31, 2010, decreased to 52.9% from 55.3% for the same period in 2009. The decrease in the cost of revenues, as a percentage of revenues, result of an increase in sales of our services on our fiber network which generated high-margins and a decrease in sales of low-margin products mainly to other carriers and to residential customers.
Marketing and Selling Expenses. Marketing and selling expenses are primarily related to compensation attributed to employees engaged in marketing and selling activities, promotion, advertising and related expenses. Marketing and selling expenses for the quarter ended March 31, 2010 decreased 7.0% to $1,107,892 from $1,190,734 for the same period in 2009. Marketing and selling expenses for the quarter ended March 31, 2010 are 7.6% of revenues, similar to the same period in 2009.
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General and Administrative Expenses. General and administrative expenses consists primarily of compensation costs for administration, finance and general management personnel and consulting fees. General and administrative expenses for the quarter ended March 31, 2010 is $5,432,000 and remained at the same level of $5,429,100 for the same period in 2009. General and administrative expenses include stock options compensation which relates to stock options that were granted to our employees and vest during the reported period. Total stock option compensation in the three months ended March 31, 2010 increased by $243,398 (or 160%) to $395,415 from $152,017 for the same period in 2009. The increase in the stock option compensation was offset with saving from& #160;a reduction in corporate cost and decline in consulting fees.
Financing Expenses, net. Financing expenses, net, for the quarter ended March 31, 2010 increased $2,640,758 to $1,094,726 from financial income of $1,546,032 for the same period in 2009. Financing expenses consist of interest payable on our Bonds, the effect of exchange rate fluctuation in the USD\NIS on our Bonds which are stated in NIS and linkage to the CPI expenses accumulated on the Bonds which are linked to the Israeli CPI. It also includes interest expenses on our interest bearing obligations and the effect of the currency exchange rate on intercompany balances with our subsidiaries which report in NIS and GBP as their functional currencies, which is of a temporary nature under the determination of SFAS 52. The increase in financing expenses is a result of a deval uation of 1.6% in the U.S. dollar against the NIS during the first quarter of 2010 versus an increase of 10.2% in the U.S. Dollar against the NIS in the same period in 2009. The increase in financing expenses was offset against a decrease in the Bonds’ outstanding principal amount.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents as of March 31, 2010, amounted to $7,330,482 compared to $2,819,393 as of December 31, 2009, an increase of $4,511,089. Net cash provided by operating activities in the three months ended March 31, 2010, was $2,193,215. The increase in cash flow from operating activities is mostly related to reduction of general and administrative expenses, decrease in account receivables and increase in account payable. Cash used for investing activities in the three months ended March 31, 2010 was $2,869,880. Out of that amount, $1,811,593 is attributable to the build out of the project under the United States Department of Agriculture in Levelland, TX and $1,058,287 to the purchase of other equipment. Net cash provided by financing acti vities for the three months ended March 31, 2010 was $5,260,788, and is primarily attributable to proceeds from the issuance of promissory note, stocks and warrants to Burlingame Equity Investors, LP for total proceeds of $6,000,000.
Our capital investments are primarily for the build-out of our fiber network, the purchase of equipment and software for services that we provide or intend to provide in Texas, Mississippi and Louisiana.
Capital lease obligations: We are the lessee of switching and other telecom equipment and motor vehicles under capital leases expiring on various dates from 2010 through 2014.
As of March 31, 2010, our continued operation reported a working capital deficit of $10,024,520 compared to a deficit of $13,449,727 on December 31, 2009. In order to overcome the deficit in our working capital, our management took the following actions: (i) On January 29, 2010, we entered into an agreement with Mr. Keinan and AMIT K LTD, a company registered in England & Wales which is wholly owned and controlled by Mr. Keinan to divest our UK operations. We expect the divestiture of the UK operations to result in a value of approximately $4,500,000 in total proceeds and future savings. Upon the approval of the transaction to divestiture the UK operations by our shareholder, we will be immediately relieved from short-term notes of approximately $1,500,000; (ii) On May 14, 2010, we signed an agreement for the sale of our holding in Xfone 018 to Marathon Telecom. The aggregate purchase price to be paid by Marathon in exchange for the interests in Xfone 018 is approximately $7,850,000, which represents a price for 100% of the interests in Xfone 018 free of any financial debt. (iii) On March 23, 2010, we entered into a securities purchase agreement with certain investors affiliated with Gagnon Securities LLC, an existing shareholder, for the issuance of our common stock for an aggregate consideration of $575,000; and (iv) as of December 31, 2009 our current liabilities include short-term credit line and notes payable of approximately $5,400,000 with our commercial bank. Of that amount, $1,850,000 was repaid on April 27, 2010. We are negotiating the renewal of the notes and the credit line with the bank and we believe that upon resolution of the negotiation we will repay most of the remaining amount after December 31, 2010.
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The following table represents our contractual obligations and commercial commitments, excluding interest expense, as of March 31, 2010.
Payments Due by Period | ||||||||||||||||||||
Contractual Obligations | Total | Less than 1 Year | 1-3 Years | 4-5 Years | More than 5 Years | |||||||||||||||
Domestic credit facility | $ | 3,392,690 | $ | 3,392,690 | $ | - | $ | - | $ | - | ||||||||||
Domestic Note Payable | 1,998,508 | 1,998,508 | - | - | - | |||||||||||||||
Foreign credit facility | 226,604 | 226,604 | - | - | - | |||||||||||||||
Other notes payable | 4,378,414 | 812,815 | 3,565,599 | - | - | |||||||||||||||
Notes Payable from the United States Department of Agriculture | 5,469,558 | 280,932 | 909,412 | 629,336 | 3,649,877 | |||||||||||||||
Bonds | 22,457,667 | 4,198,888 | 7,303,511 | 7303,511 | 3,651,756 | |||||||||||||||
Capital leases | 376,652 | 137,110 | 239,542 | - | - | |||||||||||||||
Operating leases | 6,175,278 | 1,696,037 | 4,407,761 | 71,479 | - | |||||||||||||||
Total contractual cash obligations | $ | 44,475,371 | $ | 12,743,584 | $ | 16,425,825 | 8,004,326 | $ | 7,301,633 |
We believe that funds expected to be generated from operations, proceeds from the divestiture of our operations in the UK and Israel and the control of capital spending will be sufficient to meet our anticipated cash requirements for operating needs for at least the next 12 months.
Xfone, Inc.
On December 13, 2007 (the “Date of Issuance”), we accepted offers, for the issuance of securities to Israeli institutional investors, for total gross proceeds of NIS 100,382,100 (approximately $25,562,032, based on the exchange rate as of December 13, 2007) par value non-convertible bonds (Series A) (the “Bonds”). The Bonds were issued for an amount equal to their par value.
The Bonds accrue annual interest that is paid semi-annually on the 1st of June and on the 1st of December of every year from 2008 until 2015 (inclusive). The principal of the Bonds is repaid in eight equal annual payments on the 1st of December of every year from 2008 until 2015 (inclusive). The principal and interest of the Bonds are linked to the Israeli Consumer Price Index.
On November 4, 2008, we filed a public prospectus (the “Prospectus”) with the Israel Securities Authority (the “ISA”) and the Tel Aviv Stock Exchange ("TASE") for listing of the Bonds for trading on the TASE. On November 11, 2008 (the “Date of Listing”), the Bonds commenced trading on the TASE. From the Date of Issuance until the Date of Listing, the Bonds accrued annual interest at a rate of 9%. As of the Date of Listing, the interest rate for the unpaid balance of the Bonds was reduced by 1% to an annual interest rate of 8%.
The Bonds may only be traded in Israel. The Bonds were rated A3 by Midroog Limited, an Israeli rating company which is a subsidiary of Moody’s Investor Services. On February 19, 2009, Midroog filed its annual monitoring report (the “Monitoring Report”) with the Tel-Aviv Stock Exchange. According to the Monitoring Report, Midroog’s rating committee reaffirmed the A3 rating assigned to the Bonds. However, the rating committee decided on a negative outlook on the rating of the Bonds, largely, but not exclusively, due to the increase of the risk level in the business environment in which we operate, resulting from the increasing recession in the United States and the threat it poses on our business, since our core activity is based in the U.S. While the Monitoring Report recognizes that we show relative stability in our financial results and adherence to our expected cash flow coverage ratios, it cites our currency exposure resulting from the New Israeli Shekel index-linked bonds in relation to the U.S. dollar, which is our major activity currency. On October 26, 2009, Midroog announced a rating downgrade to our series A bonds from A3 to Baa1 and is maintaining the negative outlook. According to the rating report, the rating downgrade reflects a continued downtrend in the Xfone's revenues, erosion in operating cash flow and coverage ratios, and a significant discrepancy between the level of cash flow and coverage ratios observed at the time of the initial rating and those presently observed. Midroog is maintaining the negative outlook on the rating due to the Company's relatively low liquidity, weak free cash flow and lack of a substantial volume of unused credit facilities. On December 30, 2009, Midroog filed a monitoring report with the TASE announcing the inclusion of the rating of the bond in its watch list with a negative outlook. According to the report Midroog will examine the rating with respect to our ability to repay the full payment due on December 1, 2009, and our future liquidity.
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On March 25, 2008, we issued the holders of the Bonds, for no additional consideration, 956,020 (non-tradable) warrants, each exercisable at an exercise price of $3.50 with a term of 4 years, commencing on September 2, 2008.
On December 1, 2008, we borrowed 400,000 NIS (approximately $105,208) (the “Loan”) from an individual lender unrelated to the Company pursuant to a Loan Agreement entered into on the same date, for general working capital purposes and/or for our repurchase of the Bonds. The original terms of the Loan required the repayment of the Loan in no later than 12 months from the date of the Loan, or December 1, 2009, however, the maturity of the loan was extended to 2010. The Loan bears interest at an annual rate of 8% and is (including any interest accrued thereon) linked to the Israeli Consumer Price Index. The interest is payable quarterly, at the end of each three-month period, commencing from the Loan date and continuing until the Loan is fully repaid. As of March 31, 2010, the outstanding balance of the Loan was $88,140. The loan was repaid in full during April 2010.
We have a credit facility from Bank Leumi (UK) plc (“Bank Leumi”), of up to £150,000 ($241,373), which we obtained on November 26, 2008 for general working capital purposes (the “Credit Facility”). The Credit Facility is secured by a bank guarantee given to Bank Leumi by FIBI London. The guarantee is based upon a £150,000 deposit by Iddo Keinan, son of Abraham Keinan, our Chairman of the Board, and employee of our wholly-owned UK based subsidiary, Swiftnet Limited, with FIBI London. The Credit Facility bears interest at a rate based on the London Interbank Offered Rate (“LIBOR”), plus one percent per annum, payable at the end of each three-month interest period. If we were to draw funds in excess of the agreed £150,000 amount without prior consent of Bank Leumi, we will be charge d interest at the Base Rate, which is currently 5.5% plus 5% per annum for Sterling balances. On January 29, 2010, we entered into an agreement (the “Purchase Agreement”) with Mr. Keinan and AMIT K LTD, a company registered in England & Wales which is wholly owned and controlled by Mr. Keinan (“Buyer”), pursuant to which Mr. Keinan, through Buyer, agreed to purchase from us, and we agreed to sell, 100% of the entire issued share capital of Swiftnet Limited, Auracall Limited, Equitalk.co.uk Limited, Story Telecom, Inc. and Story Telecom Limited (the “UK Subsidiaries”), which we own (the “Transaction”). The consideration of the Transaction includes, among other things, full redemption by Buyer and/or Mr. Keinan of the Credit Facility thereby releasing us from our obligation to Bank Leumi (UK) Plc.
On December 1, 2009, we issued a series of promissory notes in the aggregate amount of approximately $875,000 to various lenders who are either affiliates of ours or people related to certain affiliates and/or business partners of ours. The notes bear interest at rates between 0% and 10% and mature between one month and one year from issuance. Certain of the notes are prepayable and contain no prepayment penalties. A one month note in the amount of approximately $133,000 bears no interest unless it is not paid at maturity and then such loan bears interest at 2% per month until repaid. The notes are guaranteed by certain of our subsidiaries. The proceeds of the notes were utilized to repay obligations under our Series A Bonds. As of March 31, 2010, the outstanding balance of th ese notes was $452,915. Out of that amount, we repaid $272,124 during April 2010 and the remaining amount is due on November 30, 2010.
On December 10, 2009, we entered into a Loan Agreement as guarantor, with (i) Swiftnet Limited, our wholly owned United Kingdom subsidiary, as borrower; (ii) Iddo Keinan, as lender; and (iii) our other wholly owned UK Subsidiaries: (a) Auracall Limited, (b) Equitalk.co.uk Limited, and (c) Story Telecom Limited. Pursuant to the Agreement, Iddo Keinan agreed to extend to the Swiftnet Limited a loan in the amount of £860,045 ($1,229,263) no later than December 10, 2009. The loan was advanced as bridge funding of the payment of amounts due on our Series A Bonds. The loan had an initial maturity date of May 30, 2010, which was extended by mutual agreement to July 31, 2010. The loan shall bear interest of 1.3% per month charged on the total amount of the Iddo Keinan’s loan. In consideration for the loan, the following was gra nted as security in favor of the lender:
1. Security interest in: (i) 51% of each of the Class A shares and Class B shares of the Swiftnet; (ii) 51% of the issued share capital of Equitalk; (iii) 100% of the issued share capital of Auracall; (iv) 100% of the issued share capital of Story Telecom; |
2. Debentures over the entire assets of the Swiftnet and each UK Subsidiary. |
3. Security interest in any proceeds of a sale of the Company's interest in the capital stock of Xfone 018, Ltd., in an amount equal to the amount of the Loan. |
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On March 23, 2010, we entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an existing shareholder, Burlingame Equity Investors, LP (“Burlingame”), for the issuance of the following securities of the Company for an aggregate purchase price of $6,000,000:
(1) A senior promissory note in the aggregate principal amount of $3,500,000, maturing on March 22, 2012. Interest accrues at an annual rate of 10% and is payable quarterly. The note ranks pari passu in rights of liquidation with our Series A Bonds. |
(2) 2,173,913 shares of the Company’s common stock at a price of $1.15 per share for a total purchase price of $2,500,000. |
(3) A warrant to purchase 950,000 shares of our Common Stock, which shall be exercisable at a price of $2.00 per share for a period of 5 years. The number of shares issuable upon exercise of the Warrant, and/or the applicable exercise price, may be proportionately adjusted in the event of a stock dividend, distribution, subdivision, combination, merger, consolidation, sale of assets, spin-off or similar transactions. |
Following the execution of the Purchase Agreement, the transaction was consummated, and Burlingame paid the Purchase Price and we delivered the Note to Burlingame. We intend to use the net proceeds from the transaction for working capital purposes.
On March 23, 2010, we entered into a Subscription Agreement with certain investors affiliated with Gagnon Securities LLC, an existing shareholder (collectively, “Gagnon”), for the issuance of 500,000 Common Stock at a purchase price of $1.15 per share for an aggregate purchase price of $575,000. We intend to use the net proceeds from the transaction for working capital purposes.
US subsidiaries
Upon the assignment of the Interconnection Agreement between WS Telecom, Inc. and BellSouth Telecommunications, Inc. to Xfone USA, Inc., and consummation of the merger on March 10, 2005, we, the ultimate parent company and our subsidiaries, Swiftnet Limited and Xfone 018 Ltd., individually and/or jointly, agreed to guarantee all undisputed debts owing to BellSouth Telecommunications by Xfone USA in accordance with the assigned Interconnection Agreement. The guarantee was given on December 16, 2004, and became effective upon the consummation of the merger on March 10, 2005.
Our U.S subsidiary, NTS Communications, Inc., has a $2,000,000 revolving line of credit with a commercial bank. The facility is secured by an assignment of all NTS's trade accounts receivable. The credit line bears interest at a rate equivalent to Wall Street Journal Prime. The credit line was repaid on April 27, 2010. A related installment note in the original amount of $2,000,000 was executed on April 27, 2009. This note reduced the nominal and funded balance of the previous $4,000,000 line of credit. The installment note, which matures May 25, 2010, bears interest at Wall Street Journal Prime rate and is payable in monthly installments of $61,212.
Our U.S subsidiary, NTS Communications, Inc., has secured a loan from a commercial bank on September 18, 2007 in the original amount of $2,500,000 which was to be repaid on the following terms: 12 monthly payments of accrued interest only beginning October 18, 2007, followed by 23 monthly payments of $29,762 plus any accrued interest and a 24th and final payment of all unpaid principal and accrued interest due, on or before September 18, 2010. The loan bears interest at a rate equivalent to Wall Street Journal Prime. The loan is secured by fixed assets. The total aggregate amount of these loans as of March 31, 2010 is $1,998,508.
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NTS Telephone Company, LLC, a wholly owned subsidiary of NTS Communications, Inc., has received approval from the Rural Utilities Service (“RUS”), a division of the United States Department of Agriculture, for an $11.8 million debt facility to complete a telecommunications overbuild project in Levelland, Texas. The principal of the RUS loan is repaid monthly starting one year from the advance date until full repayment after 17 years from advance date. The loan bears interest at the average yield on outstanding marketable obligations of the United States having the final maturity comparable to the final maturity of the advance. Advances are provided as the construction progresses, and the interest rate is set based upon the prevailing rate at the time of each individual advance. The note is non- recourse to NTS and all other NTS subsidiaries and is secured by NTS Telephones assets which were $9.2 million at March 31, 2010. As of March 31, 2010, the annual average weighted interest rate on the outstanding advances was 3.74%. The total aggregate amount of these loans as of March 31, 2010 is $5,469,558.
IMPACT OF INFLATION AND CURRENCY FLUCTUATIONS
Our revenues and costs of revenues from continued operation are in U.S. dollars.
Most of our assets, liabilities (except the Bonds), revenues and expenditures are in U.S. dollars. The remainder of the assets, liabilities, revenues and expenditures are in GBP and NIS. We anticipate that the portion of U.S. dollars will continue to grow and the portion of GBP and NIS will decline.
Notwithstanding having our Bonds stated in NIS and linked to the Israeli Consumer Price Index, during the three months ended March 31, 2010, our liability was increased by approximately $350,000 as a result of the revaluation of the NIS in relation with the U.S. dollar. The increase in the liability was offset by the same amount as a result of deflation during the three months ended March 31, 2010. The increase in the outstanding Bonds liability by $615,816 is attributed to accrued interest on the outstanding Bonds principal.
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Item 3. | Quantitative and Qualitative Disclosures about Market Risk |
Not applicable.
Item 4T. | Controls and Procedures |
(a) Management’s Quarterly Report on Internal Control over Financial Reporting.
As of the end of the period covered by this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer/Principal Accounting Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer/Principal Accounting Officer have concluded that information required to be disclosed is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer/Principal Accounting Officer, to allow for timely decisions regarding required disclosure of ma terial information required to be disclosed in the reports that we file or submit under the Exchange Act. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving these objectives and our Chief Executive Officer and Chief Financial Officer/Principal Accounting Officer have concluded that our disclosure controls and procedures are effective to a reasonable assurance level of achieving such objectives. However, it should be noted that the design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
(b) Changes in Internal Control Over Financial Reporting.
There were no changes in our internal control over financial reporting identified in connection with the evaluation described above during the period covered by this Quarterly Report that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
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PART II:
OTHER INFORMATION
Item 1. | Legal Proceedings |
I. FCC Enforcement Bureau
On March 6, 2006, the FCC’s Enforcement Bureau initiated an investigation into Telephone Electronic Company’s (“TEC”) compliance with FCC Rules for compensation of payphone service providers. The Enforcement Bureau issued requests for production to TEC, its affiliates and subsidiaries. TEC was a majority shareholder of NTS Communications, Inc. ("NTS") at the time of this investigation, prior to our acquisition of NTS on February 26, 2008. On April 26, 2006, NTS filed its response to the request for production. The FCC has the authority to issue fines for violations of its regulations. NTS believes it is in compliance and will not incur any fine. The investigation is pending.
II. Teresa Leffler vs. Xfone USA
On February 24, 2009, Teresa Leffler, a former employee of Xfone USA, Inc., filed a complaint with the Circuit court of Rankin County, Mississippi, alleging sexual discrimination and sexual harassment by a former employee of Xfone USA, Marshall Wingard, and Xfone USA, that allegedly resulted in injury to her job and reputation, lost wages, mental and physical pain and suffering. Ms. Leffler seeks compensatory damages in the amount of $300,000 and punitive damages in the amount of $300,000. The filing of the complaint follows Ms. Leffler’s receipt of a Notice of Right to Sue (the “Notice”) issued by the U.S. Equal Employment Opportunity Commission (the “EEOC”) on November 21, 2008. The Notice also stated that the EEOC was terminating its processing of the charge. Xfone USA and Mr. Wingard filed t heir Original Answers on April 15, 2009. Mr. Wingard was dismissed with prejudice from the suit by agreement and stipulation on May 12, 2009. The matter against Xfone USA is pending.
III. Eliezer Tzur et al. vs. 012 Telecom Ltd. et al.
On January 19, 2010, Eliezer Tzur et al. (the “Petitioners”) filed a request to approve a claim as a class action (the “Class Action Request”) against Xfone 018 Ltd. (“Xfone 018”), our 69% owned Israel based subsidiary, and four other Israeli telecom companies, all of which are entities unrelated to us (collectively with Xfone 018, the “Defendants”), in the District Court in Petach Tikva, Israel (the “Israeli Court”). The Petitioners’ claim alleges that the Defendants have not fully fulfilled their alleged legal requirement to bear the cost of telephone calls by consumers to the Defendants’ respective technical support numbers. One of the Petitioners seeks damages for the cost such telephone calls allegedly made by him during the 5.5-year period precedin g the filing of the Class Action Request, which he assessed at NIS 54.45 (approximately $15). The Class Action Request, to the extent it pertains to Xfone 018, states total damages of NIS 7,500,000 (approximately $2,000,000) which reflects the Petitioners’ estimation of damages caused to all consumers that (pursuant to the Class Action Request) allegedly called Xfone 018’s technical support number during a certain period defined in the Class Action Request. A court hearing with respect to the approval or disapproval of the Class Action Request has been scheduled for September 19, 2010. Xfone 018 intends to vigorously defend the Class Action Request.
Item 1A. | Risk Factors |
Not applicable.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
None.
Item 3. | Defaults upon Senior Securities |
None.
Item 4. | (Removed and Reserved) |
Item 5. | Other Information |
None.
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Item 6. | Exhibits |
Exhibit Number | Description | ||
2. | Agreement and plan of reorganization dated September 20, 2000, between the Company and Swiftnet Limited. (1) | ||
3.1 | Articles of Incorporation of the Company.(1) | ||
3.1.1 | Certificate of Amendment to the Articles of Incorporation of the Company, dated January 18, 2007. (56) | ||
3.11 | Reamended and Restated Bylaws of the Company dated January 15, 2009.(55) | ||
4. | Specimen Stock Certificate.(1) | ||
10.1 | Agreement dated May 11, 2000, between Swiftnet Limited and Guy Nissenson.(1) | ||
10.2 | Employment Agreement dated January 1, 2000 with Bosmat Houston. (1) | ||
10.3 | Loan Agreement dated August 5, 2000, with Swiftnet Limited, Guy Nissenson, and Nissim Levy.(1) | ||
10.4 | Promissory Note dated September 29, 2000, between the Company and Abraham Keinan.(1) | ||
10.5 | Stock Purchase Agreement dated June 19, 2000, between Swiftnet Limited, Abraham Keinan, and Campbeltown Business Ltd. (1) | ||
10.6 | Consulting Agreement dated May 11, 2000 between Swiftnet Limited and Campbeltown Business Ltd.(1) | ||
10.7 | Agreement dated July 30, 2001, with Campbeltown Business Ltd.(1) | ||
10.8 | Contract dated June 20, 1998, with WorldCom International Ltd.(1) | ||
10.9 | Contract dated April 11, 2000, with VoiceNet Inc.(1) | ||
10.10 | Contract dated April 25, 2000, with InTouchUK.com Ltd.(1) | ||
10.11 | Letter of Understanding dated July 30, 2001, from Campbeltown Business Ltd. to the Company.(2) | ||
10.12 | Agreement dated April 6, 2000, between Adar International, Inc./Mr. Sidney J. Golub and Swiftnet Limited. (2) | ||
10.13 | Lease Agreement dated December 4, 1991, between Elmtree Investments Ltd. and Swiftnet Limited.(2) | ||
10.14 | Lease Agreement dated October 8, 2001, between Postwick Property Holdings Limited and Swiftnet Limited. (2) | ||
10.15 | Agreement dated September 30, 2002, between the Company, Swiftnet Limited., and Nir Davison.(5) | ||
10.16 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Platinum Partners Value Arbitrage Fund LP, Countrywide Partners LLC and WEC Partners LLC. (6) | ||
10.17 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Simon Langbart, Robert Langbart, Arik Ecker, Zwi Ecker, Michael Derman, Errol Derman, Yuval Haim Sobel, Zvi Sobel, Tenram Investment Ltd., Michael Zinn, Michael Weiss. (6) | ||
10.18 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Southridge Partners LP and Southshore Capital Fund Ltd. (6) | ||
10.19 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Crestview Capital Master LLC. (6) | ||
10.20 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Adam Breslawsky, Oded Levy, Michael Epstein, Steven Frank, Joshua Lobel, Joshua Kazan and The Oberon Group LLC. (6) | ||
10.21 | Newco (Auracall Limited) Formation Agreement.(6) | ||
10.22 | Agreement with ITXC Corporation.(6) | ||
10.23 | Agreement with Teleglobe International.(6) | ||
10.23.1 | Amendment to Agreement with Teleglobe International.(6) | ||
10.24 | Agreement with British Telecommunications.(6) | ||
10.25 | Agreement with Easyair Limited (OpenAir).(6) | ||
10.26 | Agreement with Worldnet.(6) | ||
10.27 | Agreement with Portfolio PR.(6) | ||
10.28 | Agreement with Stern and Company.(6) | ||
10.29 | Letter to the Company dated December 31, 2003, from Abraham Keinan.(6) | ||
10.30 | Agreement between Swiftnet Limited and Dan Kirschner.(8) |
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10.31 | Agreement and Plan of Merger.(7) | ||
10.32 | Escrow Agreement.(7) | ||
10.33 | Release Agreement.(7) | ||
10.34 | Employment Agreement date March 10, 2005, between Xfone USA, Inc. and Wade Spooner.(7) | ||
10.34.1 | Separation Agreement and Release, dated August 15, 2008, between Xfone USA, Inc. and Wade Spooner. (56) | ||
10.35 | Employment Agreement date March 10, 2005, between Xfone USA, Inc. and Ted Parsons.(7) | ||
10.35.1 | Separation Agreement and Release, dated August 15, 2008, between Xfone USA, Inc. and Ted Parsons. (56) | ||
10.36 | First Amendment to Agreement and Plan of Merger (to acquire WS Telecom, Inc.).(11) | ||
10.37 | Finders Agreement with The Oberon Group, LLC.(11) | ||
10.38 | Agreement with The Oberon Group, LLC.(11) | ||
10.39 | Management Agreement between WS Telecom, Inc. and Xfone USA, Inc.(8) | ||
10.40 | Engagement Letter to Tommy R. Ferguson, Confidentiality Agreement, and Executive Inventions Agreement dated August 19, 2004. (11) | ||
10.41 | Voting Agreement dated September 28, 2004.(11) | ||
10.42 | Novation Agreement executed September 27, 2004.(11) | ||
10.43 | Novation Agreement executed September 28, 2004.(11) | ||
10.44 | Investment Agreement dated August 26, 2004, with Ilan Shoshani.(12) | ||
10.44.1 | Addendum and Clarification to the Investment Agreement with Ilan Shoshani dated September 13, 2004. (12) | ||
10.45 | Agreement dated November 16, 2004, with Elite Financial Communications Group.(13) | ||
10.46 | Financial Services and Business Development Consulting Agreement dated November 18, 2004, with Dionysos Investments (1999) Ltd. (13) | ||
10.47 | Agreement and Plan of Merger to acquire I-55 Internet Services, Inc. dated August 18, 2005.(14) | ||
10.48 | Agreement and Plan of Merger to acquire I-55 Telecommunications, LLC dated August 26, 2005.(15) | ||
10.49 | Securities Purchase Agreement, dated September 27, 2005, by and between the Company and Laurus Master Fund, Ltd. (16) | ||
10.50 | Secured Convertible Term Note, dated September 27, 2005, by the Company in favor of Laurus Master Fund, Ltd.; Adjustment Provision Waiver Agreement, dated September 27, 2005, by and between the Company and Laurus Fund, Ltd. (16) | ||
10.51 | Common Stock Purchase Warrant, dated September 27, 2005, by the Company in favor of Laurus Master Fund, Ltd. (16) | ||
10.52 | Registration Rights Agreement, dated September 27, 2005, by and between the Company and Laurus Master Fund, Ltd. (16) | ||
10.53 | Master Security Agreement, dated September 27, 2005, by and between the Company, Xfone USA, Inc., eXpeTel Communications, Inc., Gulf Coast Utilities, Inc., and Laurus Master Fund, Ltd. (16) | �� | |
10.54 | Stock Pledge Agreement, dated September 27, 2005, by and between the Company, Xfone USA, Inc., and Laurus Master Fund, Ltd. (16) | ||
10.55 | Subsidiary Guarantee dated September 27, 2005, by Xfone USA, Inc., eXpeTel Communications, Inc. and Gulf Coast Utilities, Inc. in favor of Laurus Master Fund, Ltd. (16) | ||
10.56 | Funds Escrow Agreement, dated September 27, 2005, by and between the Company, Laurus Master Fund, Ltd. and Loeb & Loeb LLP; Disbursement Letter, dated September 27, 2005. (16) | ||
10.57 | Incremental Funding Side Letter, dated September 27, 2005, by and between the Company and Laurus Master Fund, Ltd. (16) | ||
10.58 | Securities Purchase Agreement dated September 28, 2005, by and between the Company and Crestview Capital Mater, LLC, Burlingame Equity Investors, LP, Burlingame Equity Investors II, LP, Burlingame Equity Investors (Offshore), Ltd., and Mercantile Discount - Provident Funds. (16) | ||
10.59 | Registration Rights Agreement, dated September 28, 2005, by and between the Company and Crestview Capital Mater, LLC, Burlingame Equity Investors, LP, Burlingame Equity Investors II, LP, Burlingame Equity Investors (Offshore), Ltd., and Mercantile Discount - Provident Funds. (16) | ||
10.60 | Common Stock Purchase Warrant, dated September 28, 2005, by the Company in favor of the Crestview Capital Mater, LLC, Burlingame Equity Investors, LP, Burlingame Equity Investors II, LP, Burlingame Equity Investors (Offshore), Ltd., and Mercantile Discount - Provident Funds. (16) | ||
10.61 | Escrow Agreement, dated September 28, 2005, by and between the Company, the Purchasers and Feldman Weinstein LLP. (16) | ||
10.62 | Management Agreement dated October 11, 2005.(17) | ||
10.63 | First Amendment to Agreement and Plan of Merger (to acquire I-55 Internet Services, Inc.), dated October 10, 2005. (17) | ||
10.64 | Letter Agreement with MCG Capital Corporation dated October 10, 2005.(17) | ||
10.65 | Securities Purchase Agreement, dated November 23, 2005, between the Company and Mercantile Discount - Provident Funds, Hadar Insurance Company Ltd., The Israeli Phoenix Assurance Company Ltd. and Gaon Gemel Ltd. (18) |
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10.66 | Registration Rights Agreement, dated November 23, 2005, between the Company and Mercantile Discount - Provident Funds, Hadar Insurance Company Ltd., The Israeli Phoenix Assurance Company Ltd. and Gaon Gemel Ltd. (18) | ||
10.67 | Common Stock Purchase Warrant, dated November 23, 2005, by the Company in favor of Mercantile Discount - Provident Funds, Hadar Insurance Company Ltd., The Israeli Phoenix Assurance Company Ltd. and Gaon Gemel Ltd. (18) | ||
10.68 | Escrow Agreement, dated November 23, 2005, between the Company, the Escrow Agent, and Mercantile Discount - Provident Funds, Hadar Insurance Company Ltd., The Israeli Phoenix Assurance Company Ltd. and Gaon Gemel Ltd. (18) | ||
10.69 | Management Agreement with I-55 Telecommunications, LLC dated October 12, 2005.(19) | ||
10.70 | Agreement - General Terms and Conditions with EBI Comm, Inc., dated January 1, 2006.(21) | ||
10.71 | Asset Purchase Agreement with Canufly.net, Inc., dated January 10, 2006.(21) | ||
10.72 | Stock Purchase Agreement dated May 10, 2006, by and among the Company, Story Telecom, Inc., Story Telecom Limited, Story Telecom (Ireland) Limited, Nir Davison, and Trecastle Holdings Limited. (23) | ||
10.73 | Agreement dated May 25, 2006, by and among the Company and the shareholders of Equitalk.co.uk Limited. (24) | ||
10.74 | Securities Purchase Agreement, dated June 19, 2006, by and between the Company and the Purchasers. (25) | ||
10.75 | Registration Rights Agreement, dated June 19, 2006, by and between the Company and the Purchasers. (25) | ||
10.76 | Common Stock Purchase Warrant, dated June 19, 2006, by the Company in favor of the Purchasers.(25) | ||
10.77 | Escrow Agreement, dated June 19, 2006, by and between the Company, the Escrow Agent, and the Purchasers. (25) | ||
10.78 | Form of Indemnification Agreement between the Company and its Directors and Officers.(27) | ||
10.79 | Agreement to Purchase Promissory Note dated October 31, 2005, with Randall Wade James Tricou.(27) | ||
10.80 | Agreement to Purchase Promissory Note dated October 31, 2005, with Rene Tricou - Tricou Construction. (27) | ||
10.81 | Agreement to Purchase Promissory Note dated October 31, 2005, with Rene Tricou - Bon Aire Estates. (27) | ||
10.82 | Agreement to Purchase Promissory Note dated October 31, 2005, with Rene Tricou - Bon Aire Utility. (27) | ||
10.83 | Agreement to Purchase Promissory Note dated February 3, 2006, with Danny Acosta.(27) | ||
10.84 | Letter Agreement dated November 15, 2005, with Oberon Securities, LLC.(27) | ||
10.85 | Letter Agreement dated June 15, 2006, with Oberon Securities, LLC.(27) | ||
10.86 | Second Amendment to Agreement and Plan of Merger (to acquire WS Telecom, Inc.), dated June 28, 2006. (27) | ||
10.87 | General Contract for Services dated January 1, 2005, by and between the Company and Swiftnet Limited. (27) | ||
10.88 | Service Agreement dated December 6, 2005, by and between the Company and Elite Financial Communications Group, LLC. (27) | ||
10.89 | Agreement for Market Making in Securities dated July 31, 2006, by and between the Company and Excellence Nessuah Stock Exchange Services Ltd. (27) | ||
10.90 | Shareholders Loan Agreement, dated September 27, 2006, by and between Auracall Limited, Swiftnet Limited, and Dan Kirschner. (28) | ||
10.91 | Service Agreement, dated November 7, 2006, by and between the Company and Institutional Marketing Services, Inc. (28) | ||
10.92 | Consultancy Agreement, dated November 20, 2006, by and between the Company and Crestview Capital Partners, LLP. (29) | ||
10.93 | Agreement dated December 24, 2006, by and between the Company, Halman-Aldubi Provident Funds Ltd., and Halman-Aldubi Pension Funds Ltd. [translation from Hebrew]. (31) | ||
10.94 | First Amendment to Financial Services and Business Development Consulting Agreement dated February 8, 2007, by and between the Company and Dionysos Investments (1999) Ltd. (33) | ||
10.95 | Agreement dated February 8, 2007, by and between the Company, Swiftnet Limited, Campbeltown Business, Ltd., and Mr. Abraham Keinan. (33) | ||
10.96 | First Amendment to General Contract for Services, dated March 14, 2007, by and between the Company and Swiftnet Limited. (34) | ||
10.97 | Employment Agreement, dated March 28, 2007, between Swiftnet Limited and Abraham Keinan.(34) | ||
10.98 | Consulting Agreement, dated March 28, 2007, between the Company and Abraham Keinan. (34) | ||
10.99 | Employment Agreement, dated March 28, 2007, between Swiftnet Limited and Guy Nissenson.(34) | ||
10.100 | Consulting Agreement, dated March 28, 2007, between the Company and Guy Nissenson.(34) | ||
10.101 | Settlement Agreement and Release dated May 31, 2007, by and among Embarq Logistics, Inc, Xfone USA, Inc. and the Company. (35) | ||
10.102 | Promissory Note dated May 31, 2007, by Xfone USA, Inc.(35) | ||
10.103 | Parent Guarantee dated as of May 31, 2007 by the Company in favor of Embarq Logistics, Inc.(35) | ||
10.104 | Share Purchase Agreement dated August 15, 2007, by and between Dan Kirschner, as Seller, Swiftnet Limited, as Buyer, and Xfone, Inc. (36) | ||
10.105 | Inter-Company Loan Agreement dated August 15, 2007, by and between Auracall Limited, as Lender, and Swiftnet Limited, as Borrower. (36) | ||
10.106 | Stock Purchase Agreement dated August [20], 2007, by and among the Company, NTS Communications, Inc., and the Shareholders of NTS Communications, Inc. (37) | ||
10.107 | Letter of Joint Venture dated June 15, 2007, by and among the Company and NTS Holdings, Inc.(37) |
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10.107.1 | Form of Free Cash Flow Participation Agreement to be Entered into between the Company and NTS Holdings, Inc. Upon Consummation of the Acquisition. (37) | ||
10.107.2 | Form of Employment Agreement to be entered into between NTS Communications, Inc. and Barbara Baldwin upon Consummation of the Acquisition. (37) | ||
10.107.3 | Form of Employment Agreement to be entered into between NTS Communications, Inc. and Jerry Hoover upon Consummation of the Acquisition. (37) | ||
10.107.4 | Form of Employment Agreement to be entered into between NTS Communications, Inc. and Brad Worthington upon Consummation of the Acquisition. (37) | ||
10.108 | Employment Contract signed on August 26, 2007, by and between the Company’s Israeli based Subsidiary Xfone 018 ltd. and Roni Haliva. (38) | ||
10.109 | Subscription Agreement for the Purchase of Shares of Common Stock of the Company Dated October 23, 2007. (39) | ||
10.110 | Subscription Agreement for the Purchase of Shares of Common Stock of the Company Dated November 1, 2007. (41) | ||
10.111 | Form of Subscription Agreement for the Purchase of Units Consisting of Two Shares of Common Stock and One Common Stock Purchase Warrant. (42) | ||
10.112 | Form of Common Stock Purchase Warrant.(42) | ||
10.113 | First Amendment to Stock Purchase Agreement.(43) | ||
10.114.1 | Employment agreement dated as of February 26, 2008, by and among NTS Communications, Inc. and Barbara Baldwin. (44) | ||
10.114.2 | Employment agreement dated as of February 26, 2008, by and among NTS Communications, Inc. and Jerry Hoover. (44) | ||
10.114.3 | Employment agreement dated as of February 26, 2008, by and among NTS Communications, Inc. and Brad Worthington .(44) | ||
10.115 | Free cash flow participation agreement dated as of February 26, 2008, by and among Xfone, Inc. and NTS Holdings, Inc. (44) | ||
10.116 | Escrow agreement dated as of February 26, 2008, by and among Xfone, Inc., Chris Chelette, Robert Healea and Kevin Buxkemper the NTS shareholders representatives, and Trustmark National Bank, as Escrow Agent. (44) | ||
10.117 | Release, effective as of February 26, 2008, entered into by each of Barbara Baldwin, Jerry Hoover and Brad Worthington (44) | ||
10.118 | Noncompetition, nondisclosure and nonsolicitation agreement dated as of February 26, 2008, by and among Xfone, Inc., Telephone Electronics Corporation, Joseph D. Fail, Chris Chelette, Robert Healea, Joey Garner, and Walter Frank. (44) | ||
10.119 | Second amendment to stock purchase agreement entered into by each of February 26, 2008 by and among Xfone, Inc., NTS Communications, Inc. and Chris Chelette, Robert Healea and Kevin Buxkemper, as the NTS shareholders representatives. (44) | ||
10.120 | Modification of Financial Consulting Agreement between Xfone, Inc. and Oberon Securities, LLC in connection with NTS Communications Transaction. (45) | ||
10.121 | Fees Due to Oberon Securities, LLC from Xfone, Inc. in connection with services provided in conjunction with the acquisition of NTS Communications, Inc. (45) | ||
10.122 | Agreement of Principles dated March 17, 2008 by and between Xfone 018 Ltd. and Tiv Taam Holdings 1 Ltd. [Free Translation from Hebrew]. (46) | ||
10.123 | Compromise Agreement dated March 25, 2008, between Xfone, Inc., Story Telecom, Inc., Story Telecom Limited, Trecastle Holdings Limited and Nir Davison. (47) | ||
10.124 | Securities Purchase Agreement dated March 25, 2008, between Xfone, Inc., Trecastle Holdings Limited and Nir Davison. (47) | ||
10.125 | Third Amendment to Stock Purchase Agreement entered into as of April 25, 2008 by and among Chris Chelette, Robert Healea and Kevin Buxkemper, as Sellers’ Representative, NTS Communications, Inc. and Xfone, Inc. (48) | ||
10.126 | Irrevocable Option Agreement dated as of July 1, 2008 by and between Abraham Keinan and Guy Nissenson (49) | ||
10.127 | Indenture, entered into on December 13, 2007, as amended and restated on October 27, 2008, between Xfone, Inc. and Ziv Haft Trusts Company Ltd. (free translation from Hebrew). (51) | ||
10.128 | Form of warrant (free translation from Hebrew). (51) | ||
10.129 | Underwriting Agreement between Xfone, Inc., Excellence Nessuah Underwriting (1993) Ltd. and The First International & Co. - Underwriting and Investments Ltd., dated November 2, 2008 (free translation from Hebrew). (52) | ||
10.130 | Market Making Agreement dated December 24, 2008, by and between Xfone, Inc. and Harel Finance Trade & Securities Ltd. [Free translation from Hebrew] (54) | ||
10.131 | Second Amendment to Financial Services and Business Development Consulting Agreement dated January 15, 2009, by and between Xfone, Inc. and Dionysos Investments (1999) Ltd. (55) | ||
10.132 | Employment Agreement between NTS Communications, Inc. and Niv Krikov dated July 1, 2009. (59) | ||
10.133 | Agreement dated November 20, 2009 between Xfone, Inc., David Sela and Blokshtil Ltd. (English translation). (60) | ||
10.134 | Loan Agreement dated as of December 10, 2009, between Swiftnet Limited, Iddo Keinan, Xfone, Inc., Auracall Limited, Equitalk.co.uk Limited and Story Telecom Limited. (61) | ||
10.135 | General Release and Settlement Agreement dated December 28, 2009 between Xfone, Inc., and the selling shareholders of NTS Communications, Inc. (62) | ||
10.136 | Agreement dated January 29, 2010 by and between Xfone, Inc., Abraham Keinan, and AMIT K Limited. (63) | ||
10.137 | Agreement dated January 29, 2010 by and between Xfone, Inc. and Abraham Keinan. (63) | ||
10.138 | Agreement dated January 29, 2010 by and between Abraham Keinan, Guy Nissenson and Campbeltown Business Ltd. (63) | ||
10.139 | Securities Purchase Agreement dated effective as of March 23, 2010. (64) | ||
10.140 | Form of Subscription Agreement dated as of March 23, 2010. (64) | ||
16.2 | Letter dated June 1, 2009 from Stark Winter Schenkein & Co., LLP to the Securities and Exchange Commission. (58) |
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21.1 | List of Subsidiaries (Amended as of April 2009) (57) | ||
31.1 | |||
31.2 | |||
32.1 | |||
32.2 |
(1) | Denotes previously filed exhibits: filed on August 10, 2001 with Xfone, Inc.’s SB-2 Registration Statement. | |||
(2) | Denotes previously filed exhibits: filed on October 16, 2001 with Xfone, Inc.’s SB-2/Amendment 1 Registration Statement. | |||
(5) | Denotes previously filed exhibit: filed on March 3, 2003 with Xfone, Inc.’s SB-2/Post Effective Amendment 2 Registration Statement. | |||
(6) | Denotes previously filed exhibit: filed on April 15, 2004 with Xfone’s, Inc. SB-2 Amendment 1 Registration Statement. | |||
(7) | Denotes previously filed exhibit: filed on June 1, 2004 with Xfone, Inc.’s Form 8-K. | |||
(8) | Denotes previously filed exhibit: filed on June 7, 2004 with Xfone, Inc.’s SB-2/Amendment 2 Registration Statement. | |||
(9) | Denotes previously filed exhibit: filed on August 11, 2004 with Xfone’s, Inc. SB-2 Amendment 3 Registration Statement. | |||
(10) | Denotes previously filed exhibit: filed on September 13, 2004 with Xfone’s, Inc. SB-2 Amendment 4 Registration Statement. | |||
(11) | Denotes previously filed exhibits: filed on October 4, 2004 with Xfone, Inc.’s Form 8-K | |||
(12) | Denotes previously filed exhibits: filed on November 29, 2004 with Xfone, Inc.’s Form 8-K. | |||
(13) | Denotes previously filed exhibits; filed on March 31, 2005 with Xfone, Inc.’s Form 10-KSB. | |||
(14) | Denotes previously filed exhibit: filed on August 22, 2005 with Xfone, Inc.’s Form 8-K. | |||
(15) | Denotes previously filed exhibit: filed on August 31, 2005 with Xfone, Inc.’s Form 8-K. | |||
(16) | Denotes previously filed exhibits: filed on October 3, 2005 with Xfone, Inc.’s Form 8-K. | |||
(17) | Denotes previously filed exhibits: filed on October 11, 2005 with Xfone, Inc.’s Form 8-K/A #1. | |||
(18) | Denotes previously filed exhibits: filed on November 29, 2005 with Xfone, Inc.’s Form 8-K. | |||
(19) | Denotes previously filed exhibit: filed on January 23, 2006 with Xfone, Inc.’s Form 8-K/A #3. | |||
(21) | Denotes previously filed exhibit: filed on January 31, 2006 with Xfone, Inc.’s Form 8-K. | |||
(23) | Denotes previously filed exhibit: filed on May 16, 2006 with Xfone, Inc.’s Form 8-K. | |||
(24) | Denotes previously filed exhibit: filed on May 30, 2006 with Xfone, Inc.’s Form 8-K. |
(25) | Denotes previously filed exhibits: filed on June 20, 2006 with Xfone, Inc.’s Form 8-K. | |||
(27) | Denotes previously filed exhibits: filed on July 31, 2006 with Xfone, Inc.’s Form 8-K. | |||
(28) | Denotes previously filed exhibits: filed on November 14, 2006 with Xfone, Inc.’s Form 10-QSB. | |||
(29) | Denotes previously filed exhibit: filed on November 22, 2006 with Xfone, Inc.’s Form 8-K. | |||
(31) | Denotes previously filed exhibit: filed on December 28, 2006 with Xfone, Inc.’s Form 8-K. | |||
(33) | Denotes previously filed exhibits: filed on February 8, 2007 with Xfone, Inc.’s Form 8-K. | |||
(34) | Denotes previously filed exhibits; filed on March 30, 2007 with Xfone, Inc.’s Form 10-KSB. | |||
(35) | Denotes previously filed exhibits: filed on May 31, 2007 with Xfone, Inc.’s Form 8-K. | |||
(36) | Denotes previously filed exhibits: filed on August 15, 2007 with Xfone, Inc.’s Form 8-K. | |||
(37) | Denotes previously filed exhibits: filed on August 22, 2007 with Xfone, Inc.’s Form 8-K. | |||
(38) | Denotes previously filed exhibit: filed on August 27, 2007 with Xfone, Inc.’s Form 8-K. | |||
(39) | Denotes previously filed exhibit: filed on October 23, 2007 with Xfone, Inc.’s Form 8-K. | |||
(41) | Denotes previously filed exhibit: filed on November 5, 2007 with Xfone, Inc.’s Form 8-K. |
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(42) | Denotes previously filed exhibits: filed on December 14, 2007 with Xfone, Inc.’s Form 8-K. | |||
(43) | Denotes previously filed exhibit: filed on February 14, 2008 with Xfone, Inc.’s Form 8-K. | |||
(44) | Denotes previously filed exhibits: filed on February 26, 2008 with Xfone, Inc.’s Form 8-K. | |||
(45) | Denotes previously filed exhibits: filed on March 6, 2008 with Xfone, Inc.’s Form 8-K. | |||
(46) | Denotes previously filed exhibit: filed on March 17, 2008 with Xfone, Inc.’s Form 8-K. | |||
(47) | Denotes previously filed exhibits: filed on March 25 with Xfone, Inc.’s Form 8-K. | |||
(48) | Denotes previously filed exhibit: filed on May 1, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(49) | Denotes previously filed exhibit: filed on July 1, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(51) | Denotes previously filed exhibit: filed on October 28, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(52) | Denotes previously filed exhibit: filed on November 4, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(54) | Denotes previously filed exhibit: filed on December 24, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(55) | Denotes previously filed exhibit: filed on January 16, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(56) | Denotes previously filed exhibit: filed on April 1, 2009 with Xfone, Inc.‘s Form 10-K. | |||
(57) | Denotes previously filed exhibit: filed on April 30, 2009 with Xfone, Inc.‘s Form 10-K/A. | |||
(58) | Denotes previously filed exhibit: filed on June 3, 2009 with Xfone, Inc.‘s Form 8-K/A. | |||
(59) | Denotes previously filed exhibit: filed on July 1, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(60) | Denotes previously filed exhibit: filed on November 30, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(61) | Denotes previously filed exhibit: filed on December 11, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(62) | Denotes previously filed exhibit: filed on December 29, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(63) | Denotes previously filed exhibits: filed on January 29, 2010 with Xfone, Inc.‘s Form 8-K. | |||
(64) | Denotes previously filed exhibits: filed on March 23, 2010 with Xfone, Inc.‘s Form 8-K. |
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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.
XFONE, INC. | ||
Date: May 17, 2010 | By: | /s/ Guy Nissenson |
Guy Nissenson President, Chief Executive Officer and Director (principal executive officer) |
Date: May 17, 2010 | By: | /s/ Niv Krikov |
Niv Krikov Principal Accounting Officer, Treasurer and Chief Financial Officer (principal accounting and financial officer) | ||
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INDEX TO EXHIBITS
Exhibit Number | Description | ||
2. | Agreement and plan of reorganization dated September 20, 2000, between the Company and Swiftnet Limited. (1) | ||
3.1 | Articles of Incorporation of the Company.(1) | ||
3.1.1 | Certificate of Amendment to the Articles of Incorporation of the Company, dated January 18, 2007. (56) | ||
3.11 | Reamended and Restated Bylaws of the Company dated January 15, 2009.(55) | ||
4. | Specimen Stock Certificate.(1) | ||
10.1 | Agreement dated May 11, 2000, between Swiftnet Limited and Guy Nissenson.(1) | ||
10.2 | Employment Agreement dated January 1, 2000 with Bosmat Houston. (1) | ||
10.3 | Loan Agreement dated August 5, 2000, with Swiftnet Limited, Guy Nissenson, and Nissim Levy.(1) | ||
10.4 | Promissory Note dated September 29, 2000, between the Company and Abraham Keinan.(1) | ||
10.5 | Stock Purchase Agreement dated June 19, 2000, between Swiftnet Limited, Abraham Keinan, and Campbeltown Business Ltd. (1) | ||
10.6 | Consulting Agreement dated May 11, 2000 between Swiftnet Limited and Campbeltown Business Ltd.(1) | ||
10.7 | Agreement dated July 30, 2001, with Campbeltown Business Ltd.(1) | ||
10.8 | Contract dated June 20, 1998, with WorldCom International Ltd.(1) | ||
10.9 | Contract dated April 11, 2000, with VoiceNet Inc.(1) | ||
10.10 | Contract dated April 25, 2000, with InTouchUK.com Ltd.(1) | ||
10.11 | Letter of Understanding dated July 30, 2001, from Campbeltown Business Ltd. to the Company.(2) | ||
10.12 | Agreement dated April 6, 2000, between Adar International, Inc./Mr. Sidney J. Golub and Swiftnet Limited. (2) | ||
10.13 | Lease Agreement dated December 4, 1991, between Elmtree Investments Ltd. and Swiftnet Limited.(2) | ||
10.14 | Lease Agreement dated October 8, 2001, between Postwick Property Holdings Limited and Swiftnet Limited. (2) | ||
10.15 | Agreement dated September 30, 2002, between the Company, Swiftnet Limited., and Nir Davison.(5) | ||
10.16 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Platinum Partners Value Arbitrage Fund LP, Countrywide Partners LLC and WEC Partners LLC. (6) | ||
10.17 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Simon Langbart, Robert Langbart, Arik Ecker, Zwi Ecker, Michael Derman, Errol Derman, Yuval Haim Sobel, Zvi Sobel, Tenram Investment Ltd., Michael Zinn, Michael Weiss. (6) | ||
10.18 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Southridge Partners LP and Southshore Capital Fund Ltd. (6) | ||
10.19 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Crestview Capital Master LLC. (6) | ||
10.20 | As to Form: Shares and Warrant Purchase Agreement, Irrevocable Proxy, Warrant A, Warrant B and Registration Rights Agreement of Selling Shareholders Adam Breslawsky, Oded Levy, Michael Epstein, Steven Frank, Joshua Lobel, Joshua Kazan and The Oberon Group LLC. (6) | ||
10.21 | Newco (Auracall Limited) Formation Agreement.(6) | ||
10.22 | Agreement with ITXC Corporation.(6) | ||
10.23 | Agreement with Teleglobe International.(6) | ||
10.23.1 | Amendment to Agreement with Teleglobe International.(6) | ||
10.24 | Agreement with British Telecommunications.(6) | ||
10.25 | Agreement with Easyair Limited (OpenAir).(6) | ||
10.26 | Agreement with Worldnet.(6) | ||
10.27 | Agreement with Portfolio PR.(6) | ||
10.28 | Agreement with Stern and Company.(6) | ||
10.29 | Letter to the Company dated December 31, 2003, from Abraham Keinan.(6) | ||
10.30 | Agreement between Swiftnet Limited and Dan Kirschner.(8) |
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10.31 | Agreement and Plan of Merger.(7) | ||
10.32 | Escrow Agreement.(7) | ||
10.33 | Release Agreement.(7) | ||
10.34 | Employment Agreement date March 10, 2005, between Xfone USA, Inc. and Wade Spooner.(7) | ||
10.34.1 | Separation Agreement and Release, dated August 15, 2008, between Xfone USA, Inc. and Wade Spooner. (56) | ||
10.35 | Employment Agreement date March 10, 2005, between Xfone USA, Inc. and Ted Parsons.(7) | ||
10.35.1 | Separation Agreement and Release, dated August 15, 2008, between Xfone USA, Inc. and Ted Parsons. (56) | ||
10.36 | First Amendment to Agreement and Plan of Merger (to acquire WS Telecom, Inc.).(11) | ||
10.37 | Finders Agreement with The Oberon Group, LLC.(11) | ||
10.38 | Agreement with The Oberon Group, LLC.(11) | ||
10.39 | Management Agreement between WS Telecom, Inc. and Xfone USA, Inc.(8) | ||
10.40 | Engagement Letter to Tommy R. Ferguson, Confidentiality Agreement, and Executive Inventions Agreement dated August 19, 2004. (11) | ||
10.41 | Voting Agreement dated September 28, 2004.(11) | ||
10.42 | Novation Agreement executed September 27, 2004.(11) | ||
10.43 | Novation Agreement executed September 28, 2004.(11) | ||
10.44 | Investment Agreement dated August 26, 2004, with Ilan Shoshani.(12) | ||
10.44.1 | Addendum and Clarification to the Investment Agreement with Ilan Shoshani dated September 13, 2004. (12) | ||
10.45 | Agreement dated November 16, 2004, with Elite Financial Communications Group.(13) | ||
10.46 | Financial Services and Business Development Consulting Agreement dated November 18, 2004, with Dionysos Investments (1999) Ltd. (13) | ||
10.47 | Agreement and Plan of Merger to acquire I-55 Internet Services, Inc. dated August 18, 2005.(14) | ||
10.48 | Agreement and Plan of Merger to acquire I-55 Telecommunications, LLC dated August 26, 2005.(15) | ||
10.49 | Securities Purchase Agreement, dated September 27, 2005, by and between the Company and Laurus Master Fund, Ltd. (16) | ||
10.50 | Secured Convertible Term Note, dated September 27, 2005, by the Company in favor of Laurus Master Fund, Ltd.; Adjustment Provision Waiver Agreement, dated September 27, 2005, by and between the Company and Laurus Fund, Ltd. (16) | ||
10.51 | Common Stock Purchase Warrant, dated September 27, 2005, by the Company in favor of Laurus Master Fund, Ltd. (16) | ||
10.52 | Registration Rights Agreement, dated September 27, 2005, by and between the Company and Laurus Master Fund, Ltd. (16) | ||
10.53 | Master Security Agreement, dated September 27, 2005, by and between the Company, Xfone USA, Inc., eXpeTel Communications, Inc., Gulf Coast Utilities, Inc., and Laurus Master Fund, Ltd. (16) | ||
10.54 | Stock Pledge Agreement, dated September 27, 2005, by and between the Company, Xfone USA, Inc., and Laurus Master Fund, Ltd. (16) | ||
10.55 | Subsidiary Guarantee dated September 27, 2005, by Xfone USA, Inc., eXpeTel Communications, Inc. and Gulf Coast Utilities, Inc. in favor of Laurus Master Fund, Ltd. (16) | ||
10.56 | Funds Escrow Agreement, dated September 27, 2005, by and between the Company, Laurus Master Fund, Ltd. and Loeb & Loeb LLP; Disbursement Letter, dated September 27, 2005. (16) | ||
10.57 | Incremental Funding Side Letter, dated September 27, 2005, by and between the Company and Laurus Master Fund, Ltd. (16) | ||
10.58 | Securities Purchase Agreement dated September 28, 2005, by and between the Company and Crestview Capital Mater, LLC, Burlingame Equity Investors, LP, Burlingame Equity Investors II, LP, Burlingame Equity Investors (Offshore), Ltd., and Mercantile Discount - Provident Funds. (16) | ||
10.59 | Registration Rights Agreement, dated September 28, 2005, by and between the Company and Crestview Capital Mater, LLC, Burlingame Equity Investors, LP, Burlingame Equity Investors II, LP, Burlingame Equity Investors (Offshore), Ltd., and Mercantile Discount - Provident Funds. (16) | ||
10.60 | Common Stock Purchase Warrant, dated September 28, 2005, by the Company in favor of the Crestview Capital Mater, LLC, Burlingame Equity Investors, LP, Burlingame Equity Investors II, LP, Burlingame Equity Investors (Offshore), Ltd., and Mercantile Discount - Provident Funds. (16) | ||
10.61 | Escrow Agreement, dated September 28, 2005, by and between the Company, the Purchasers and Feldman Weinstein LLP. (16) | ||
10.62 | Management Agreement dated October 11, 2005.(17) | ||
10.63 | First Amendment to Agreement and Plan of Merger (to acquire I-55 Internet Services, Inc.), dated October 10, 2005. (17) | ||
10.64 | Letter Agreement with MCG Capital Corporation dated October 10, 2005.(17) | ||
10.65 | Securities Purchase Agreement, dated November 23, 2005, between the Company and Mercantile Discount - Provident Funds, Hadar Insurance Company Ltd., The Israeli Phoenix Assurance Company Ltd. and Gaon Gemel Ltd. (18) |
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10.66 | Registration Rights Agreement, dated November 23, 2005, between the Company and Mercantile Discount - Provident Funds, Hadar Insurance Company Ltd., The Israeli Phoenix Assurance Company Ltd. and Gaon Gemel Ltd. (18) | ||
10.67 | Common Stock Purchase Warrant, dated November 23, 2005, by the Company in favor of Mercantile Discount - Provident Funds, Hadar Insurance Company Ltd., The Israeli Phoenix Assurance Company Ltd. and Gaon Gemel Ltd. (18) | ||
10.68 | Escrow Agreement, dated November 23, 2005, between the Company, the Escrow Agent, and Mercantile Discount - Provident Funds, Hadar Insurance Company Ltd., The Israeli Phoenix Assurance Company Ltd. and Gaon Gemel Ltd. (18) | ||
10.69 | Management Agreement with I-55 Telecommunications, LLC dated October 12, 2005.(19) | ||
10.70 | Agreement - General Terms and Conditions with EBI Comm, Inc., dated January 1, 2006.(21) | ||
10.71 | Asset Purchase Agreement with Canufly.net, Inc., dated January 10, 2006.(21) | ||
10.72 | Stock Purchase Agreement dated May 10, 2006, by and among the Company, Story Telecom, Inc., Story Telecom Limited, Story Telecom (Ireland) Limited, Nir Davison, and Trecastle Holdings Limited. (23) | ||
10.73 | Agreement dated May 25, 2006, by and among the Company and the shareholders of Equitalk.co.uk Limited. (24) | ||
10.74 | Securities Purchase Agreement, dated June 19, 2006, by and between the Company and the Purchasers. (25) | ||
10.75 | Registration Rights Agreement, dated June 19, 2006, by and between the Company and the Purchasers. (25) | ||
10.76 | Common Stock Purchase Warrant, dated June 19, 2006, by the Company in favor of the Purchasers.(25) | ||
10.77 | Escrow Agreement, dated June 19, 2006, by and between the Company, the Escrow Agent, and the Purchasers. (25) | ||
10.78 | Form of Indemnification Agreement between the Company and its Directors and Officers.(27) | ||
10.79 | Agreement to Purchase Promissory Note dated October 31, 2005, with Randall Wade James Tricou.(27) | ||
10.80 | Agreement to Purchase Promissory Note dated October 31, 2005, with Rene Tricou - Tricou Construction. (27) | ||
10.81 | Agreement to Purchase Promissory Note dated October 31, 2005, with Rene Tricou - Bon Aire Estates. (27) | ||
10.82 | Agreement to Purchase Promissory Note dated October 31, 2005, with Rene Tricou - Bon Aire Utility. (27) | ||
10.83 | Agreement to Purchase Promissory Note dated February 3, 2006, with Danny Acosta.(27) | ||
10.84 | Letter Agreement dated November 15, 2005, with Oberon Securities, LLC.(27) | ||
10.85 | Letter Agreement dated June 15, 2006, with Oberon Securities, LLC.(27) | ||
10.86 | Second Amendment to Agreement and Plan of Merger (to acquire WS Telecom, Inc.), dated June 28, 2006. (27) | ||
10.87 | General Contract for Services dated January 1, 2005, by and between the Company and Swiftnet Limited. (27) | ||
10.88 | Service Agreement dated December 6, 2005, by and between the Company and Elite Financial Communications Group, LLC. (27) | ||
10.89 | Agreement for Market Making in Securities dated July 31, 2006, by and between the Company and Excellence Nessuah Stock Exchange Services Ltd. (27) | ||
10.90 | Shareholders Loan Agreement, dated September 27, 2006, by and between Auracall Limited, Swiftnet Limited, and Dan Kirschner. (28) | ||
10.91 | Service Agreement, dated November 7, 2006, by and between the Company and Institutional Marketing Services, Inc. (28) | ||
10.92 | Consultancy Agreement, dated November 20, 2006, by and between the Company and Crestview Capital Partners, LLP. (29) | ||
10.93 | Agreement dated December 24, 2006, by and between the Company, Halman-Aldubi Provident Funds Ltd., and Halman-Aldubi Pension Funds Ltd. [translation from Hebrew]. (31) | ||
10.94 | First Amendment to Financial Services and Business Development Consulting Agreement dated February 8, 2007, by and between the Company and Dionysos Investments (1999) Ltd. (33) | ||
10.95 | Agreement dated February 8, 2007, by and between the Company, Swiftnet Limited, Campbeltown Business, Ltd., and Mr. Abraham Keinan. (33) | ||
10.96 | First Amendment to General Contract for Services, dated March 14, 2007, by and between the Company and Swiftnet Limited. (34) | ||
10.97 | Employment Agreement, dated March 28, 2007, between Swiftnet Limited and Abraham Keinan.(34) | ||
10.98 | Consulting Agreement, dated March 28, 2007, between the Company and Abraham Keinan. (34) | ||
10.99 | Employment Agreement, dated March 28, 2007, between Swiftnet Limited and Guy Nissenson.(34) | ||
10.100 | Consulting Agreement, dated March 28, 2007, between the Company and Guy Nissenson.(34) | ||
10.101 | Settlement Agreement and Release dated May 31, 2007, by and among Embarq Logistics, Inc, Xfone USA, Inc. and the Company. (35) | ||
10.102 | Promissory Note dated May 31, 2007, by Xfone USA, Inc.(35) | ||
10.103 | Parent Guarantee dated as of May 31, 2007 by the Company in favor of Embarq Logistics, Inc.(35) | ||
10.104 | Share Purchase Agreement dated August 15, 2007, by and between Dan Kirschner, as Seller, Swiftnet Limited, as Buyer, and Xfone, Inc. (36) | ||
10.105 | Inter-Company Loan Agreement dated August 15, 2007, by and between Auracall Limited, as Lender, and Swiftnet Limited, as Borrower. (36) | ||
10.106 | Stock Purchase Agreement dated August [20], 2007, by and among the Company, NTS Communications, Inc., and the Shareholders of NTS Communications, Inc. (37) | ||
10.107 | Letter of Joint Venture dated June 15, 2007, by and among the Company and NTS Holdings, Inc.(37) |
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10.107.1 | Form of Free Cash Flow Participation Agreement to be Entered into between the Company and NTS Holdings, Inc. Upon Consummation of the Acquisition. (37) | ||
10.107.2 | Form of Employment Agreement to be entered into between NTS Communications, Inc. and Barbara Baldwin upon Consummation of the Acquisition. (37) | ||
10.107.3 | Form of Employment Agreement to be entered into between NTS Communications, Inc. and Jerry Hoover upon Consummation of the Acquisition. (37) | ||
10.107.4 | Form of Employment Agreement to be entered into between NTS Communications, Inc. and Brad Worthington upon Consummation of the Acquisition. (37) | ||
10.108 | Employment Contract signed on August 26, 2007, by and between the Company’s Israeli based Subsidiary Xfone 018 ltd. and Roni Haliva. (38) | ||
10.109 | Subscription Agreement for the Purchase of Shares of Common Stock of the Company Dated October 23, 2007. (39) | ||
10.110 | Subscription Agreement for the Purchase of Shares of Common Stock of the Company Dated November 1, 2007. (41) | ||
10.111 | Form of Subscription Agreement for the Purchase of Units Consisting of Two Shares of Common Stock and One Common Stock Purchase Warrant. (42) | ||
10.112 | Form of Common Stock Purchase Warrant.(42) | ||
10.113 | First Amendment to Stock Purchase Agreement.(43) | ||
10.114.1 | Employment agreement dated as of February 26, 2008, by and among NTS Communications, Inc. and Barbara Baldwin. (44) | ||
10.114.2 | Employment agreement dated as of February 26, 2008, by and among NTS Communications, Inc. and Jerry Hoover. (44) | ||
10.114.3 | Employment agreement dated as of February 26, 2008, by and among NTS Communications, Inc. and Brad Worthington .(44) | ||
10.115 | Free cash flow participation agreement dated as of February 26, 2008, by and among Xfone, Inc. and NTS Holdings, Inc. (44) | ||
10.116 | Escrow agreement dated as of February 26, 2008, by and among Xfone, Inc., Chris Chelette, Robert Healea and Kevin Buxkemper the NTS shareholders representatives, and Trustmark National Bank, as Escrow Agent. (44) | ||
10.117 | Release, effective as of February 26, 2008, entered into by each of Barbara Baldwin, Jerry Hoover and Brad Worthington (44) | ||
10.118 | Noncompetition, nondisclosure and nonsolicitation agreement dated as of February 26, 2008, by and among Xfone, Inc., Telephone Electronics Corporation, Joseph D. Fail, Chris Chelette, Robert Healea, Joey Garner, and Walter Frank. (44) | ||
10.119 | Second amendment to stock purchase agreement entered into by each of February 26, 2008 by and among Xfone, Inc., NTS Communications, Inc. and Chris Chelette, Robert Healea and Kevin Buxkemper, as the NTS shareholders representatives. (44) | ||
10.120 | Modification of Financial Consulting Agreement between Xfone, Inc. and Oberon Securities, LLC in connection with NTS Communications Transaction. (45) | ||
10.121 | Fees Due to Oberon Securities, LLC from Xfone, Inc. in connection with services provided in conjunction with the acquisition of NTS Communications, Inc. (45) | ||
10.122 | Agreement of Principles dated March 17, 2008 by and between Xfone 018 Ltd. and Tiv Taam Holdings 1 Ltd. [Free Translation from Hebrew]. (46) | ||
10.123 | Compromise Agreement dated March 25, 2008, between Xfone, Inc., Story Telecom, Inc., Story Telecom Limited, Trecastle Holdings Limited and Nir Davison. (47) | ||
10.124 | Securities Purchase Agreement dated March 25, 2008, between Xfone, Inc., Trecastle Holdings Limited and Nir Davison. (47) | ||
10.125 | Third Amendment to Stock Purchase Agreement entered into as of April 25, 2008 by and among Chris Chelette, Robert Healea and Kevin Buxkemper, as Sellers’ Representative, NTS Communications, Inc. and Xfone, Inc. (48) | ||
10.126 | Irrevocable Option Agreement dated as of July 1, 2008 by and between Abraham Keinan and Guy Nissenson (49) | ||
10.127 | Indenture, entered into on December 13, 2007, as amended and restated on October 27, 2008, between Xfone, Inc. and Ziv Haft Trusts Company Ltd. (free translation from Hebrew). (51) | ||
10.128 | Form of warrant (free translation from Hebrew). (51) | ||
10.129 | Underwriting Agreement between Xfone, Inc., Excellence Nessuah Underwriting (1993) Ltd. and The First International & Co. - Underwriting and Investments Ltd., dated November 2, 2008 (free translation from Hebrew). (52) | ||
10.130 | Market Making Agreement dated December 24, 2008, by and between Xfone, Inc. and Harel Finance Trade & Securities Ltd. [Free translation from Hebrew] (54) | ||
10.131 | Second Amendment to Financial Services and Business Development Consulting Agreement dated January 15, 2009, by and between Xfone, Inc. and Dionysos Investments (1999) Ltd. (55) | ||
10.132 | Employment Agreement between NTS Communications, Inc. and Niv Krikov dated July 1, 2009. (59) | ||
10.133 | Agreement dated November 20, 2009 between Xfone, Inc., David Sela and Blokshtil Ltd. (English translation). (60) | ||
10.134 | Loan Agreement dated as of December 10, 2009, between Swiftnet Limited, Iddo Keinan, Xfone, Inc., Auracall Limited, Equitalk.co.uk Limited and Story Telecom Limited. (61) | ||
10.135 | General Release and Settlement Agreement dated December 28, 2009 between Xfone, Inc., and the selling shareholders of NTS Communications, Inc. (62) | ||
10.136 | Agreement dated January 29, 2010 by and between Xfone, Inc., Abraham Keinan, and AMIT K Limited. (63) | ||
10.137 | Agreement dated January 29, 2010 by and between Xfone, Inc. and Abraham Keinan. (63) | ||
10.138 | Agreement dated January 29, 2010 by and between Abraham Keinan, Guy Nissenson and Campbeltown Business Ltd. (63) | ||
10.139 | Securities Purchase Agreement dated effective as of March 23, 2010. (64) | ||
10.140 | Form of Subscription Agreement dated as of March 23, 2010. (64) | ||
16.2 | Letter dated June 1, 2009 from Stark Winter Schenkein & Co., LLP to the Securities and Exchange Commission. (58) |
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21.1 | List of Subsidiaries (Amended as of April 2009) (57) | ||
31.1 | |||
31.2 | |||
32.1 | |||
32.2 |
(1) | Denotes previously filed exhibits: filed on August 10, 2001 with Xfone, Inc.’s SB-2 Registration Statement. | |||
(2) | Denotes previously filed exhibits: filed on October 16, 2001 with Xfone, Inc.’s SB-2/Amendment 1 Registration Statement. | |||
(5) | Denotes previously filed exhibit: filed on March 3, 2003 with Xfone, Inc.’s SB-2/Post Effective Amendment 2 Registration Statement. | |||
(6) | Denotes previously filed exhibit: filed on April 15, 2004 with Xfone’s, Inc. SB-2 Amendment 1 Registration Statement. | |||
(7) | Denotes previously filed exhibit: filed on June 1, 2004 with Xfone, Inc.’s Form 8-K. | |||
(8) | Denotes previously filed exhibit: filed on June 7, 2004 with Xfone, Inc.’s SB-2/Amendment 2 Registration Statement. | |||
(9) | Denotes previously filed exhibit: filed on August 11, 2004 with Xfone’s, Inc. SB-2 Amendment 3 Registration Statement. | |||
(10) | Denotes previously filed exhibit: filed on September 13, 2004 with Xfone’s, Inc. SB-2 Amendment 4 Registration Statement. | |||
(11) | Denotes previously filed exhibits: filed on October 4, 2004 with Xfone, Inc.’s Form 8-K | |||
(12) | Denotes previously filed exhibits: filed on November 29, 2004 with Xfone, Inc.’s Form 8-K. | |||
(13) | Denotes previously filed exhibits; filed on March 31, 2005 with Xfone, Inc.’s Form 10-KSB. | |||
(14) | Denotes previously filed exhibit: filed on August 22, 2005 with Xfone, Inc.’s Form 8-K. | |||
(15) | Denotes previously filed exhibit: filed on August 31, 2005 with Xfone, Inc.’s Form 8-K. | |||
(16) | Denotes previously filed exhibits: filed on October 3, 2005 with Xfone, Inc.’s Form 8-K. | |||
(17) | Denotes previously filed exhibits: filed on October 11, 2005 with Xfone, Inc.’s Form 8-K/A #1. | |||
(18) | Denotes previously filed exhibits: filed on November 29, 2005 with Xfone, Inc.’s Form 8-K. | |||
(19) | Denotes previously filed exhibit: filed on January 23, 2006 with Xfone, Inc.’s Form 8-K/A #3. | |||
(21) | Denotes previously filed exhibit: filed on January 31, 2006 with Xfone, Inc.’s Form 8-K. | |||
(23) | Denotes previously filed exhibit: filed on May 16, 2006 with Xfone, Inc.’s Form 8-K. | |||
(24) | Denotes previously filed exhibit: filed on May 30, 2006 with Xfone, Inc.’s Form 8-K. |
(25) | Denotes previously filed exhibits: filed on June 20, 2006 with Xfone, Inc.’s Form 8-K. | |||
(27) | Denotes previously filed exhibits: filed on July 31, 2006 with Xfone, Inc.’s Form 8-K. | |||
(28) | Denotes previously filed exhibits: filed on November 14, 2006 with Xfone, Inc.’s Form 10-QSB. | |||
(29) | Denotes previously filed exhibit: filed on November 22, 2006 with Xfone, Inc.’s Form 8-K. | |||
(31) | Denotes previously filed exhibit: filed on December 28, 2006 with Xfone, Inc.’s Form 8-K. | |||
(33) | Denotes previously filed exhibits: filed on February 8, 2007 with Xfone, Inc.’s Form 8-K. | |||
(34) | Denotes previously filed exhibits; filed on March 30, 2007 with Xfone, Inc.’s Form 10-KSB. | |||
(35) | Denotes previously filed exhibits: filed on May 31, 2007 with Xfone, Inc.’s Form 8-K. | |||
(36) | Denotes previously filed exhibits: filed on August 15, 2007 with Xfone, Inc.’s Form 8-K. | |||
(37) | Denotes previously filed exhibits: filed on August 22, 2007 with Xfone, Inc.’s Form 8-K. | |||
(38) | Denotes previously filed exhibit: filed on August 27, 2007 with Xfone, Inc.’s Form 8-K. | |||
(39) | Denotes previously filed exhibit: filed on October 23, 2007 with Xfone, Inc.’s Form 8-K. | |||
(41) | Denotes previously filed exhibit: filed on November 5, 2007 with Xfone, Inc.’s Form 8-K. |
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(42) | Denotes previously filed exhibits: filed on December 14, 2007 with Xfone, Inc.’s Form 8-K. | |||
(43) | Denotes previously filed exhibit: filed on February 14, 2008 with Xfone, Inc.’s Form 8-K. | |||
(44) | Denotes previously filed exhibits: filed on February 26, 2008 with Xfone, Inc.’s Form 8-K. | |||
(45) | Denotes previously filed exhibits: filed on March 6, 2008 with Xfone, Inc.’s Form 8-K. | |||
(46) | Denotes previously filed exhibit: filed on March 17, 2008 with Xfone, Inc.’s Form 8-K. | |||
(47) | Denotes previously filed exhibits: filed on March 25 with Xfone, Inc.’s Form 8-K. | |||
(48) | Denotes previously filed exhibit: filed on May 1, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(49) | Denotes previously filed exhibit: filed on July 1, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(51) | Denotes previously filed exhibit: filed on October 28, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(52) | Denotes previously filed exhibit: filed on November 4, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(54) | Denotes previously filed exhibit: filed on December 24, 2008 with Xfone, Inc.‘s Form 8-K. | |||
(55) | Denotes previously filed exhibit: filed on January 16, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(56) | Denotes previously filed exhibit: filed on April 1, 2009 with Xfone, Inc.‘s Form 10-K. | |||
(57) | Denotes previously filed exhibit: filed on April 30, 2009 with Xfone, Inc.‘s Form 10-K/A. | |||
(58) | Denotes previously filed exhibit: filed on June 3, 2009 with Xfone, Inc.‘s Form 8-K/A. | |||
(59) | Denotes previously filed exhibit: filed on July 1, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(60) | Denotes previously filed exhibit: filed on November 30, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(61) | Denotes previously filed exhibit: filed on December 11, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(62) | Denotes previously filed exhibit: filed on December 29, 2009 with Xfone, Inc.‘s Form 8-K. | |||
(63) | Denotes previously filed exhibits: filed on January 29, 2010 with Xfone, Inc.‘s Form 8-K. | |||
(64) | Denotes previously filed exhibits: filed on March 23, 2010 with Xfone, Inc.‘s Form 8-K. |
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