(Check One): | UNITED STATES | |||||
¨ Form 10-K | SECURITIES AND EXCHANGE | |||||
COMMISSION | ||||||
¨ Form 20-F | Washington, D.C. 20549 | |||||
¨ Form 11-K | ||||||
x Form 10-Q | FORM 12b-25 | SEC File Number: 0-4465 | ||||
¨ Form N-SAR | CUSIP Number: 384739 10 9 | |||||
¨ Form N-CSR | NOTIFICATION OF LATE FILING | |||||
For Period Ended: August 31, 2006 | ||||||
¨ | Transition Report on Form 10-K | |||||
¨ | Transition Report on Form 20-F | |||||
¨ | Transition Report on Form 11-K | |||||
¨ | Transition Report on Form 10-Q | |||||
¨ | Transition Report on Form N-SAR | |||||
¨ | Transition Report on Form N-CSR | |||||
For the Transition Period Ended: _______________________________ | ||||||
Nothing in this form shall be construed to imply that the Commission has verified any information | ||||||
contained herein. | ||||||
If the notification relates to a portion of the filing checked above, identify the Item(s) to which the notification relates:______ | ||||||
PART I - REGISTRANT INFORMATION | ||||||
eLEC Communications Corp. | ||||||
Full name of registrant | ||||||
Former name if applicable |
75 South Broadway, Suite 302 | ||||
Address of principal executive office (Street and number) | ||||
White Plains, New York 10601 | ||||
City, state and zip code | ||||
PART II - RULES 12b-25(b) and (c) | ||||
If the subject report could not be filed without unreasonable effort or expense and the registrant seeks relief | ||||
pursuant to Rule 12b-25(b), the following should be completed. (Check box if appropriate.) | ||||
x | (a) | The reasons described in reasonable detail in Part III of this form could not be eliminated without | ||
unreasonable effort or expense; | ||||
(b) | The subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, Form | |||
11-K, Form N-SAR or Form N-CSR, or portion thereof, will be filed on or before the fifteenth | ||||
calendar day following the prescribed due date; or the subject quarterly report or transition report on | ||||
Form 10-Q, or portion thereof will be filed on or before the fifth calendar day following the | ||||
prescribed due date; and | ||||
(c) | The accountant’s statement or other exhibit required by Rule 12b-25(c) has been attached if | |||
applicable. | ||||
PART III – NARRATIVE | ||||
State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, N-SAR, N-CSR, or the transition | ||||
report or portion thereof, could not be filed within the prescribed time period. | ||||
Certain financial and other information necessary for an accurate and full completion of the Quarterly | ||||
Report on Form 10-Q could not be provided within the prescribed time period without unreasonable effort | ||||
or expense. | ||||
As a result of the foregoing, our Quarterly Report on Form 10-Q for the quarter ended August 31, 2006 will | ||||
be filed on or before October 23, 2006, which is within the extension period provided under Rule 12b-25. | ||||
PART IV - OTHER INFORMATION | ||||
(1) | Name and telephone number of person to contact in regard to this notification: | |||
Eric M. Hellige (212) 421-4100 | ||||
(2) | Have all other periodic reports required under Section 13 or 15(d) of the Securities Exchange Act of | |||
1934 or Section 30 of the Investment Company Act of 1940 during the preceding 12 months or for such |
shorter period that the registrant was required to file such report(s) been filed? If the answer is no, |
identify report(s). x Yes ¨ No |
(3) Is it anticipated that any significant change in results of operations from the corresponding period for |
the last fiscal year will be reflected by the earnings statements to be included in the subject report or |
portion thereof? x Yes ¨ No |
If so, attach an explanation of the anticipated change, both narratively and quantitatively, and, if |
appropriate, state the reasons why a reasonable estimate of the results cannot be made. |
As previously reported, we are no longer focusing on growing our wireline telephone business and we are |
using the cash generated by this mature customer base to help fund the growth of our newly-developed |
digital telephone service that routes telephone calls over the Internet. Although the number of digital |
telephone numbers we have in service continues to grow and exceeds 5,300 numbers, our revenue per line |
for digital phone services is less than our revenue per line for wireline service. The decrease in the number |
of wirelines and the overall decrease in our average revenue per line caused our revenue for the three- |
month period ended August 31, 2006 to decrease by approximately $2,198,000, or approximately 53%, to |
approximately $1,949,000 as compared to approximately $4,147,000 reported for the three-month period |
ended August 31, 2005. |
Our gross profit for the three-month period ended August 31, 2006 decreased by approximately $1,173,000 |
to approximately $734,000 from approximately $1,907,000 reported in the three-month period ended |
August 31, 2005. During the three-month period ended August 31, 2006, our gross profit percentage |
decreased to 37.7% from 46.0% during the comparable 2005 period. The decrease in our gross profit |
resulted primarily from the decrease in the size of our customer base in the third quarter of fiscal 2006 |
relative to the third quarter in fiscal 2005, and the higher cost of services we are now incurring under our |
wholesale services agreement with Verizon. |
Selling, general and administrative expenses decreased by approximately $137,000, or approximately 11%, |
to approximately $1,166,000 for the three-month period ended August 31, 2006 from approximately |
$1,303,000 reported in prior year fiscal period. |
Our bad debt expense, net of recoveries, decreased by approximately $940,000, or approximately 100%, to |
approximately $3,000 for the three months ended August 31, 2006 from approximately $943,000 reported |
in the prior fiscal period. This decrease was related to the reduction in the number of wireline customers |
we had during the 2006 period and the fact that the remaining wireline customers represent a mature base |
that has consistently paid their bills. Further, because we require credit card payment from our retail digital |
telephone service customers, our new customers have not been generating bad debt expense. |
The change in warrant valuation for the three-month period ended August 31, 2006 amounted to income of |
approximately $406,000 compared to income of approximately $35,000 for the same period in fiscal 2005. |
The increase was due to the change in the value of our common stock. |
For the three-month period ended August 31, 2005, we reported a gain on sales of investment securities of |
approximately $323,000. There were no security transactions in 2006. |
eLEC Communications Corp. | ||
(Name of Registrant as Specified in Charter) | ||
has caused this notification to be signed on its behalf by the undersigned thereunto duly authorized. | ||
Date: October 17, 2006 | By: | /s/ Paul H. Riss |
Paul H Riss | ||
Chief Executive Officer | ||
INSTRUCTION: The form may be signed by an executive officer of the registrant or by any other duly | ||
authorized representative. The name and title of the person signing the form shall be typed or printed | ||
beneath the signature. If the statement is signed on behalf of the registrant by an authorized representative | ||
(other than an executive officer), evidence of the representative’s authority to sign on behalf of the | ||
registrant shall be filed with the form. | ||
ATTENTION | ||
Intentional misstatements or omissions of fact constitute Federal criminal violations (See 18 U.S.C. | ||
1001). |