UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-KSB/A
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended November 30, 2004
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to ________________.
Commission File No. 0-4465
eLEC COMMUNICATIONS CORP.
(Name of Small Business Issuer in Its Charter)
New York 13-2511270
(State or Other Jurisdiction (I.R.S Employer
of Incorporation or Organization) Identification No.)
75 South Broadway, Suite 302, White Plains, New York 10601
(Address of Principal Executive Offices) (Zip Code)
(914) 682-0214
(Issuer's Telephone Number, Including Area Code)
Securities registered under Section 12(b) of the Exchange Act:
None
Securities registered under Section 12(g) of the Exchange Act:
Common Stock, par value $.10 per share
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 .
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Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB.
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State issuer's revenue for its most recent fiscal year: $9,557,600
As of February 28, 2005, the aggregate market value of the voting and
non-voting common equity held by non-affiliates of the issuer was $8,793,668.
As of February 28, 2005, there were 16,759,282 shares outstanding of the
issuer's Common Stock.
Documents incorporated by reference: Definitive proxy statement of eLEC
Communications Corp. relating to the Annual Meeting of Stockholder filed with
the Commission within 120 days after the end of the fiscal year covered by this
Form 10-KSB, which is incorporated into Part II of this Form 10-KSB.
Transitional Small Business Disclosure Format (check one): Yes No X
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EXPLANATORY NOTE FOR FILING OF FORM 10-KSB/A
This Amendment No. 2 to our Annual Report on Form 10-KSB for the fiscal
year ended November 30, 2004, which was originally filed on March 15, 2005 (as
amended by Amendment No. 1 to Form 10-KSB filed on April 26, 2005, the "Original
Filing"), amends and restates in its entirety Item 8A of Part II of the Original
Filing to amend and supplement the information regarding disclosure controls and
procedures required by Item 307 of Regulation S-B. Item 13 of Part III has also
been amended to reflect the inclusion of updated certifications of Paul H. Riss,
our Chief Executive Officer and Chief Financial Officer, filed herewith as
Exhibit 31.1 and 32.1.
The other Items of the Original Filing are unaffected by the changes
described above and have not been amended in this Amendment No. 2 on Form
10-KSB/A to the Annual Report. All information in this Amendment No. 2 on Form
10-KSB/A to the Annual Report is as of the date of the Original Filing and does
not reflect any subsequent information or events occurring after the date of the
Original Filing. Accordingly, this Amendment No. 2 on Form 10-KSB/A to the
Annual Report should be read in conjunction with our filings made with the
Securities and Exchange Commission subsequent to the filing of the Original
Filing, including any amendments to those filings.
PART II
Item 8A. Controls and Procedures.
(a) Disclosure Controls and Procedures. Our management, with the
participation of our chief executive officer/chief financial officer, has
evaluated the effectiveness of our disclosure controls and procedures (as such
term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) as of the end of the period
covered by this Report. Based on such evaluation, our chief executive
officer/chief financial officer has concluded that, as of the end of such
period, for the reasons set forth below, our disclosure controls and procedures
were not effective. We are presently taking the necessary steps to improve the
effectiveness of such disclosure controls and procedures.
(b) Internal Control Over Financial Reporting. There have not been any
changes in our internal control over financial reporting (as such term is
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the
fourth quarter of 2004 that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting. In
connection with our year-end November 30, 2004 audit, our management became
aware of a lack of segregation of duties within our accounting and
administrative departments due to the small number of employees performing our
financial and administrative functions. Management believes the lack of
segregation of duties, in the aggregate, amounts to a material weakness in our
internal control over financial reporting. We will continue to evaluate the
employees involved, the additional control procedures in place to help
compensate for the lack of segregation of duties, the risks associated with such
lack of segregation and whether the potential benefits of adding employees to
clearly segregate duties justifies the expense associated with such increases.
We are also evaluating our internal controls systems so that when we are
required to do so, our management will be able to report on, and our independent
auditors to attest to, our internal controls, as required by Section 404 of the
Sarbanes-Oxley Act of 2002. We will be performing the system and process
evaluation and testing (and any necessary remediation) required in an effort to
comply with the
management certification and auditor attestation requirements of Section 404 of
the Sarbanes-Oxley Act. In connection with our year-end November 30, 2004 audit,
we have identified the following control deficiencies and issues with our
internal controls over financial reporting that we believe amount in the
aggregate to a significant deficiency in our internal controls over financial
reporting:
o We are aware that many of the internals controls that are in place
are undocumented controls. Although we have documented many of our
systems and processes, we will need to expend a substantial amount
of time to obtain the full documentation required to be in
compliance with Section 404 of the Sarbanes-Oxley Act of 2002.
o After the end of our fiscal year, when we were preparing state tax
returns for telecommunication taxes, we identified that we had been
overstating telecom taxes payable for certain taxes that were paid
by us directly to our carrier instead of being paid directly to the
taxing authorities. We have adjusted our controls to mitigate this
type of event from occurring in future periods.
Due to the voluminous nature of state and local telecom taxes and
the small quantity of taxes payable to certain municipalities, we do
not remit all our telecom taxes in a timely manner. Certain taxes
that we should be remitting on a monthly basis, we remit quarterly
or semi-annually because many of the checks and returns that we are
processing are for payments of less than $50. We are aware of other
telephone companies that follow this process. We continue to monitor
the responses, if any, we receive from the tax authorities regarding
late filings and we do not intend to remit such taxes on a timely
manner in the future, unless we determine that it would be more
cost-effective to us to do so.
PART III
Item 13. - Exhibits List and Reports on Form 8-K.
(a) Exhibits List. The following exhibits are filed with this Report:
(31.1)Certification of our Chief Executive Officer and Chief
Financial Officer, Paul H. Riss, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
(32.1)Certification of our Chief Executive Officer and Chief
Financial Officer, Paul H. Riss, pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, we have duly caused this Report to be signed on our behalf
by the undersigned, thereunto duly authorized on the 25th day of May 2005.
eLEC COMMUNICATIONS CORP.
(Company)
By: /s/ Paul H. Riss
-----------------------
Paul H. Riss
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the Company
and in the capacities and on the dates indicated.
Signature Title Date
--------------------- ---------------------------------- ------------
/s/ Paul H. Riss Chairman of the Board of Directors May 25, 2005
--------------------- Chief Executive Officer
Paul H. Riss Chief Financial Officer
(Principal Accounting Officer)
/s/ Greg M Cooper Director May 25, 2005
---------------------
Greg M Cooper
/s/ Gayle Greer Director May 25, 2005
---------------------
Gayle Greer
/s/ Michael Khalilian Director May 25, 2005
---------------------
Michael Khalilian
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