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UNITED STATES |
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| ¨ Form 10-K |
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SECURITIES AND EXCHANGE |
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COMMISSION |
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| ¨ Form 20-F |
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Washington, D.C. 20549 |
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| ¨ Form 11-K |
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| x Form 10-Q |
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FORM 12b-25 |
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SEC File Number: 0-4465 |
| ¨ Form N-SAR |
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CUSIP Number: 384739 10 9 |
| ¨ Form N-CSR |
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NOTIFICATION OF LATE FILING |
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For Period Ended: August 31, 2006 |
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Transition Report on Form 10-K |
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Transition Report on Form 20-F |
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Transition Report on Form 11-K |
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Transition Report on Form 10-Q |
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Transition Report on Form N-SAR |
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Transition Report on Form N-CSR |
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For the Transition Period Ended: _______________________________ |
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| Nothing in this form shall be construed to imply that the Commission has verified any information |
| contained herein. |
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If the notification relates to a portion of the filing checked above, identify the Item(s) to which the
notification relates:______ |
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| PART I - REGISTRANT INFORMATION |
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| eLEC Communications Corp. |
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| Full name of registrant |
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| Former name if applicable |
| 75 South Broadway, Suite 302 |
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| Address of principal executive office (Street and number) |
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| White Plains, New York 10601 |
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| City, state and zip code |
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| PART II - RULES 12b-25(b) and (c) |
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| 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.) |
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(a) |
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The reasons described in reasonable detail in Part III of this form could not be eliminated without |
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unreasonable effort or expense; |
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(b) |
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The subject annual report, semi-annual report, transition report on Form 10-K, Form 20-F, Form |
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11-K, Form N-SAR or Form N-CSR, or portion thereof, will be filed on or before the fifteenth |
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calendar day following the prescribed due date; or the subject quarterly report or transition report on |
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Form 10-Q, or portion thereof will be filed on or before the fifth calendar day following the |
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prescribed due date; and |
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(c) |
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The accountant’s statement or other exhibit required by Rule 12b-25(c) has been attached if |
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applicable. |
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| PART III – NARRATIVE |
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| 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. |
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| 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. |
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| 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. |
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| PART IV - OTHER INFORMATION |
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| (1) |
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Name and telephone number of person to contact in regard to this notification: |
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| Eric M. Hellige (212) 421-4100 |
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| (2) |
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Have all other periodic reports required under Section 13 or 15(d) of the Securities Exchange Act of |
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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 |
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| (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 |
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| 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. |
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| 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. |
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| 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. |
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| 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. |
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| 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. |
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| 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. |
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| 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. |