SECURITIES AND EXCHANGE COMMISSION | ||
Washington, D.C. 20549 | ||
FORM 8-K | ||
CURRENT REPORT | ||
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 | ||
Date of report: November 15, 2006 | ||
(Date of earliest event reported) | ||
eLEC COMMUNICATIONS CORP. | ||
(Exact name of Registrant as specified in its charter) | ||
New York | ||
(State or other jurisdiction of incorporation) | ||
0-4465 | 13-2511270 | |
(Commission File No.) | (I.R.S. Employer | |
Identification No.) |
75 South Broadway, Suite 302 | ||
White Plains, New York 10601 | ||
(Address of principal executive offices; zip code) | ||
(914) 682-0214 | ||
(Registrant’s telephone number, including area code) | ||
N/A | ||
(Former Name or Former Address, if changed Since Last Report) | ||
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the | ||
filing obligation of the registrant under any of the following provisions (seeGeneral Instruction A.2. | ||
below): | ||
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
¨ | Pre-commencement communications pursuant to Rule 14-2(b) under the Exchange Act (17 | |
CFR 240.14d-2(b)) | ||
¨ | Pre-commencement communications pursuant to Rule 13-4(e) under the Exchange Act (17 | |
CFR 240.13e-4(c)) | ||
404839/04081.00042 |
SECTION 2 – FINANCIAL INFORMATION | ||||
Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off- | |||
Balance Sheet Arrangement of a Registrant. | ||||
As previously reported, on June 2, 2006 the Company consummated a private placement | ||||
with Laurus Master Fund, Ltd., a Cayman Islands corporation (“Laurus”), pursuant to which the | ||||
Company issued to Laurus a secured term note in the principal amount of $1,700,000 (the | ||||
“Note”). The Note was divided into two pieces, consisting of an “Amortizing Principal Amount” | ||||
of $650,000 and a “Non-Amortizing Principal Amount” of $1,050,000. On June 2, 2006, the | ||||
Company received the Amortizing Principal Amount, and the Non-Amortizing Principal Amount | ||||
was placed in a restricted cash account and held in escrow pending a future transaction. The | ||||
Company received the Non-Amortizing Principal Amount on November 15, 2006, because it met | ||||
certain performance milestones that had been established by Laurus. The Note matures on May | ||||
31, 2009 and requires monthly principal payments beginning on June 1, 2007. Interest is | ||||
payable on the unpaid principal on the Note at a rate per annum equal to the “prime rate” | ||||
published inThe Wall Street Journalfrom time to time, plus two percent (2%). | ||||
Please see Item 1.01 of the Company’s June 2, 2006 Current Report on Form 8-K, which | ||||
is incorporated herein by reference, for a description of the terms of the sale of the Note to | ||||
Laurus. | ||||
SECTION 3 – SECURITIES AND TRADING MARKETS | ||||
Item 3.02. | Unregistered Sales of Equity Securities. | |||
On November 20, 2006, the Company paid to Source Capital Group, Inc. (“Source | ||||
Capital”), in consideration of the introduction made by Source Capital of Laurus to the Company, | ||||
a finder’s fee in the amount of $84,000 and issued to or at the direction of Source Capital | ||||
common stock purchase warrants (the “Source Warrants”) to purchase up to an aggregate of | ||||
400,000 shares of Common Stock at an exercise price of $0.21 per share. The Source Warrants | ||||
expire on November 15, 2010. The Source Warrants were issued in reliance on the exemption | ||||
from registration provided by Section 4(2) of the Act, on the basis that their issuance did not | ||||
involve a public offering and satisfied the conditions of Rule 506 of the Act, and Source Capital | ||||
represented to us that it is an “accredited investor,” as defined in the Act. | ||||
SECTION 9 – FINANCIAL STATEMENT AND EXHIBITS | ||||
Item 9.01 | Financial Statements and Exhibits. | |||
(c) | Exhibits. | |||
404839/04081.00042 |
Number | Documents | |
10.1 | Securities Purchase Agreement, dated as of May 31, 2006, between eLEC | |
Communications Corp. and Laurus Master Fund, Ltd., incorporated by | ||
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K | ||
dated June 2, 2006 | ||
10.2 | Secured Term Note, dated as of May 31, 2005, between eLEC | |
Communications Corp. and Laurus Master Fund, Ltd. incorporated by | ||
reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K | ||
dated June 2, 2006. | ||
10.3 | Reaffirmation and Ratification Agreement, dated as of May 31, 2006, | |
executed by eLEC Communications Corp., New Rochelle Telephone | ||
Corp., Telecarrier Services, Inc., Vox Communications Corp., Line One, | ||
Inc., AVI Holding Corp. and TelcoSoftware.com Corp., incorporated by | ||
reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K | ||
dated June 2, 2006. | ||
10.4 | Form of Common Stock Purchase Warrant, dated as of November 15, | |
2006, issued by eLEC Communications Corp. to or on the order of Source | ||
Capital Group, Inc., incorporated by reference to Exhibit 10.6 to the | ||
Company’s Current Report on Form 8-K dated June 2, 2006. | ||
404839/04081.00042 | ||
2 |
SIGNATURES | ||||
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the | ||||
registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly | ||||
authorized. | ||||
eLEC COMMUNICATIONS CORP. | ||||
Date: November 20, 2006 | By: | /s/ Paul H. Riss | ||
Paul H. Riss | ||||
Chief Executive Officer | ||||
3 |