eLEC Communications Secures $2 Million Financing with Laurus Funds.WHITE PLAINS, N.Y. -- eLEC Communications Corp. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ELEC) today announced that it has raised $2 million from the sale of its three-year fixed price secured convertible note to Laurus Master Fund, Ltd. ("Laurus Funds"). The proceeds of the sale will be used primarily to support the growth of its wholly-owned Voice over IP (VoIP) subsidiary, VoX Communications. Under the terms of the Laurus Funds financing, the note is payable in cash or convertible into shares of eLEC's common stock at a conversion price of $0.61 per share. The note bears an interest rate equal to the Wall Street Journal Prime Rate
The Wall Street Journal Prime Rate (WSJ Prime Rate) is defined by The Wall Street Journal (WSJ) as "The base rate on corporate loans posted by at least plus 2% and may be adjusted downward under certain circumstances. eLEC will file a Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. to further disseminate details of the transaction, including items such as registration rights and warrants. "We are very pleased with our funding agreement Funding Agreement Illiquid insurance contracts that provide guaranteed principal repayment and interest payments for a predetermined period of time. Notes: Funding agreements are marketed to mutual fund companies and municipal reinvestments. with Laurus," said Paul Riss, eLEC's CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "This financing provides us with cash to grow our VoIP business and increases our ability to win a bigger share of the rapidly evolving VoIP marketplace." About VoX Communications Based in Celebration, Fla., VoX Communications (a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of eLEC Communications Corp.) offers wholesale broadband voice, origination and termination services for cable operators, carriers, ISPs, CLECs, resellers and other wireless and wireline operators, as well as enhanced VoIP telephone service to the small business and residential marketplace. VoX's VoIP services are a feature-rich, low-cost and high-quality alternative to traditional landline phone service. For more information, visit www.voxcorp.net. About eLEC Communications eLEC Communications Corp. is a telecommunications holding company that is taking advantage of the convergence of the technological and regulatory developments in the Internet and telecommunications markets. eLEC's operating subsidiaries An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. provide an integrated suite of telephone services to business and residential customers, including local, long distance, dedicated access, and VoIP. For more information, visit www.elec.net. This release contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. eLEC's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, among others, certain risks and uncertainties over which the company may have no control. For further discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see the discussions contained in eLEC's Annual Report on Form 10-KSB for the year ended November 30, 2004 and Quarterly Report on Form 10-QSB for the period ending August 31, 2005, and any subsequent SEC filings. |
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