Mail Stop 4-7
April 7, 2005
Via U.S. Mail and Fax (212) 326-0806
Mr. Paul H. Riss
Chief Executive Officer
eLec Communications Corp.
75 South Broadway, Suite 302
White Plains, New York 10601
RE: eLec Communications Corp.
Form 10-KSB for the fiscal year ended November 30, 2004
Filed March 15, 2005
File No. 0-04465
Form SB-2
Filed March 30, 2005
File No. 333-123696
Dear Mr. Riss:
We have limited our review to the risk factors section in
your
Form SB-2 and the Item 8A disclosure in your Form 10-KSB and have
the
following comments. Unless otherwise indicated, please revise
your
Form 10-KSB to comply with these comments no later than 10
business
days from the date of this letter. If you disagree with any of
our
comments, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. After reviewing this information,
we
may or may not raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 10-KSB for the fiscal year ended November 30, 2004
Item 8A. Controls and Procedures, page 18
1. We note the absence of disclosure regarding your principal
executive officer`s and principal financial officer`s conclusions
as
to the effectiveness of your disclosure controls and procedures as
of
November 30, 2004. Please revise to provide this disclosure as
required by Item 307 of Regulation S-B. We note that your
auditors
indicated in March 2005 that these problems resulted in your
internal
control over financial reporting not being effective.
2. As currently drafted, the significance of the lack of
segregation
of duties and absence of documented controls is not clear. Revise
your Form 10-KSB to discuss and clarify the following:
* Were the problems identified as part of your Section 404
compliance
efforts?
* Do these problems, either individually or in the aggregate,
amount
to a material weakness or significant deficiency in your internal
control over financial reporting?
* Did the company attempt to remedy these problems during fiscal
2004? Continue to update remediation efforts in your future
periodic
reports.
3. We note your statement that you identified certain deficiencies
with your internal controls related to the preparation of tax
returns
and remitting telecom taxes. Please clarify in your amended
filing
whether you considered them significant deficiencies in your
internal
control over financial reporting. We note that you have adjusted
your controls "to mitigate this type of event from occurring in
future periods." Please advise in your response letter whether
these
adjustments will be reflected in your next Form 10-QSB as changes
to
your internal control over financial reporting that have
materially
affected, or are reasonably likely to materially affect, your
internal control over financial reporting.
4. You state that the identified deficiencies and issues with your
internal controls were "not limited" to the preparation of state
tax
returns for telecommunication taxes and remitting of telecom taxes
quarterly or semi-annually. Please revise your Form 10-KSB to
disclose the other significant deficiencies and material
weaknesses
that existed as of your November 30, 2004 fiscal year end, when
those
problems were identified, and what remedial actions, if any, have
been taken to eliminate the problems.
Form SB-2
5. Please amend the registration statement to include the
signature
of the principal accounting officer for eLec Communications Corp.
* * * *
Please furnish a cover letter on EDGAR that keys your
responses
to our comments and provides us with any requested supplemental
information. Detailed cover letters greatly facilitate our
review.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filings reviewed by the staff to
be
certain that they have provided all information investors require
for
an informed decision. Since the company and its management are in
possession of all facts relating to a company`s disclosure, they
are
responsible for the accuracy and adequacy of the disclosures that
they have made.
Notwithstanding our comments, in the event the company
requests
acceleration of the effective date of the pending registration
statement, it should furnish a letter, at the time of such
request,
acknowledging that:
* should the Commission or the staff, acting pursuant to delegated
authority, declare the filing effective, it does not foreclose the
Commission from taking any action with respect to the filing;
* the action of the Commission or the staff, acting pursuant to
delegated authority, in declaring the filing effective, does not
relieve the company from its full responsibility for the adequacy
and
accuracy of the disclosure in the filing; and
* the Company may not assert this action as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in connection with our review of
your
filing or in response to our comments on your filing.
We will consider a written request for acceleration of the
effective date of the registration statement as confirmation of
the
fact that those requesting acceleration are aware of their
respective
responsibilities under the Securities Act of 1933 and the
Securities
Exchange Act of 1934 as they may relate to the proposed public
offering of the securities specified in the above registration
statement. We will act on the request and, pursuant to delegated
authority, grant acceleration of the effective date.
We direct your attention to Rules 460 and 461 regarding
requesting acceleration of a registration statement. Please allow
adequate time after the filing of any amendment for further review
before submitting a request for acceleration. Please provide this
request at least two business days in advance of the requested
effective date.
Please contact Derek Swanson, Staff Attorney, at (202) 824-
5526,
or me at (202) 942-1990 with any questions.
Sincerely,
Larry Spirgel
Assistant Director
cc: Eric M. Helige, Esq.
Pryor Cashman Sherman & Flynn LLP
Via Fax: (212) 326-0806
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Mr. Paul H. Riss, CEO
eLec Communications Corp.
April 27, 2005
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