UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB

(Mark One)

[X]   QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE ACT
      OF 1934.

For the quarterly period ended May 31, 2005.
                               ------------

                                       OR

[_]   TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT
      OF 1934.

For the transition period from                      to                     .
                               --------------------    --------------------

                          Commission file number 0-4465
                                                 ------

                            eLEC Communications Corp.
--------------------------------------------------------------------------------
        (Exact Name of Small Business Issuer as Specified 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)


Issuer's Telephone Number, Including Area Code     914-682-0214
                                                   ------------


      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    .
    ---     ---

      State the number of shares  outstanding of each of the issuer's classes of
common equity, as of the latest  practicable  date:  16,779,282 shares of Common
Stock, par value $.10 per share, as of July 1, 2005.


<PAGE>

                          PART 1. FINANCIAL INFORMATION
                          -----------------------------

Item 1.  Financial Statements
         --------------------

                   eLEC Communications Corp. and Subsidiaries
                      Condensed Consolidated Balance Sheet
<TABLE>
<CAPTION>
                                                                       May 31, 2005
                                                                       ------------
                                                                        (Unaudited)
<S>                                                                    <C>
Assets
Current assets:
  Cash and cash equivalents                                            $    490,645
  Accounts receivable, net                                                1,809,890
  Prepaid expenses and other current assets                                  76,398
                                                                       ------------
Total current assets                                                      2,376,933

Property, plant and equipment, net                                          411,714

Other assets                                                                 95,729

Deferred finance costs                                                      276,044
                                                                       ------------
Total assets                                                           $  3,160,420
                                                                       ============

Liabilities and stockholders' equity deficiency
Current liabilities:
  Short-term borrowings                                                $    295,636
  Current maturities of long-term debt and capital lease
     obligations                                                            759,373
  Accounts payable and accrued expenses                                   2,673,708
  Taxes payable                                                             786,725
  Due to related party                                                       74,876
  Deferred revenue                                                          486,750
                                                                       ------------
Total current liabilities                                                 5,077,068
                                                                       ------------

Long-term debt                                                              532,036
                                                                       ------------

Stockholders' equity deficiency:
  Common stock, $.10 par value, 50,000,000 shares authorized,
    16,779,282 shares issued                                              1,677,928
  Capital in excess of par value                                         26,567,204
  Deficit                                                               (30,686,582)
  Accumulated other comprehensive loss, unrealized loss on
     securities                                                              (7,234)
                                                                       ------------
    Total stockholders' equity deficiency                                (2,448,684)
                                                                       ------------
Total liabilities and stockholders' equity deficiency                  $  3,160,420
                                                                       ============
</TABLE>

See notes to the condensed consolidated financial statements.


                                       2
<PAGE>
<TABLE>
<CAPTION>
                                   eLEC Communications Corp. and Subsidiaries
                  Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)
                                                    (Unaudited)

                                                               For the Six Months Ended      For the Three Months Ended
                                                              May 31, 2005   May 31, 2004   May 31, 2005   May 31, 2004
                                                              ------------   ------------   ------------   ------------
<S>                                                           <C>            <C>            <C>            <C>
Revenues                                                      $ 8,678,855    $ 3,769,924    $ 4,815,376    $ 1,895,932
                                                              -----------    -----------    -----------    -----------

Costs and expenses:
 Costs of services                                              4,553,740      1,796,701      2,498,201        916,626
 Selling, general and administrative                            5,729,817      1,940,059      3,508,810      1,003,413
 Depreciation and amortization                                      3,442          7,811          2,087          3,953
                                                              -----------    -----------    -----------    -----------
               Total costs and expenses                        10,286,999      3,744,571      6,009,098      1,923,992
                                                              -----------    -----------    -----------    -----------

Income (loss) from operations                                  (1,608,144)        25,353     (1,193,722)       (28,060)
                                                              -----------    -----------    -----------    -----------

Other income (expense):
Interest expense                                                 (316,188)        (3,544)      (264,572)          (782)
Interest and other income                                          34,973         51,069         17,709         21,988
Gain on sale of investment securities and other investments        29,634            770         29,634            770
Change in warrant valuation                                       116,993             --         69,904             --
                                                              -----------    -----------    -----------    -----------
       Total other income (expense)                              (134,588)        48,295       (147,325)        21,976
                                                              -----------    -----------    -----------    -----------

Income (loss) before bankruptcy reorganization
items and income tax benefit                                   (1,742,732)        73,648     (1,341,047)        (6,084)
                                                              -----------    -----------    -----------    -----------

Reorganization items:
  Gain on settlement with creditors                                    --        904,027             --        852,553
  Professional fees                                                    --       (161,008)            --        (40,942)
                                                              -----------    -----------    -----------    -----------
                                                                       --        743,019             --        811,611
                                                              -----------    -----------    -----------    -----------

Income (loss) before income tax benefit                        (1,742,732)       816,667     (1,341,047)       805,527

Income tax benefit                                                     --        (47,937)            --         (2,937)
                                                              -----------    -----------    -----------    -----------

Net income (loss)                                              (1,742,732)       864,604     (1,341,047)       808,464

Other comprehensive loss -
  unrealized loss on marketable securities                         (4,983)        (2,296)        (4,398)        (2,296)
                                                              -----------    -----------    -----------    -----------

Comprehensive income (loss)
                                                              ($1,747,715)   $   862,308    ($1,345,445)   $   806,168
                                                              ===========    ===========    ===========    ===========
Basic and diluted earnings (loss) per share                        ($0.10)         $0.05         ($0.08)         $0.05
                                                              ===========    ===========    ===========    ===========

Weighted average number of common shares outstanding
   Basic                                                       16,722,359     16,258,730     16,762,108     16,259,782
                                                              ===========    ===========    ===========    ===========
   Diluted                                                     16,722,359     16,580,715     16,762,108     16,592,854
                                                              ===========    ===========    ===========    ===========
</TABLE>

 See notes to the condensed consolidated financial statements.


                                       3
<PAGE>

                   eLEC Communications Corp. and Subsidiaries
                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

<TABLE>
<CAPTION>
                                                          For the Six Months Ended
                                                         May 31, 2005   May 31, 2004
                                                         ------------   ------------
<S>                                                      <C>            <C>
Net cash used in operating activities:                   ($1,663,448)   ($  450,810)
                                                         -----------    -----------

Cash flows used in investing activities:
   Purchase of property and equipment                       (222,744)        (3,319)
   Purchase of investment securities                          (4,923)        (4,546)
   Proceeds from the sale of investment securities
      and other investments                                   14,828            770
                                                         -----------    -----------
Net cash used in investing activities                       (212,839)        (7,095)
                                                         -----------    -----------

Cash flows from financing activities:
   Repayment of long-term debt                               (60,606)        (4,422)
   Proceeds from short-term borrowings                       273,686             --
   Proceeds from secured convertible note                  1,744,500             --
   Proceeds from the exercise of options                      37,500             --
                                                         -----------    -----------
   Net cash provided by (used in) financing activities     1,995,080         (4,422)
                                                         -----------    -----------

Increase (decrease) in cash and cash equivalents             118,793       (462,327)
Cash and cash equivalents at beginning of period             371,852        669,022
                                                         -----------    -----------
Cash and cash equivalents at the end of period           $   490,645    $   206,695
                                                         ===========    ===========
</TABLE>

See notes to the condensed consolidated financial statements.


                                       4
<PAGE>

                            eLEC COMMUNICATIONS CORP.
                            -------------------------

        Notes To Condensed Consolidated Financial Statements (Unaudited)
        ----------------------------------------------------------------


Note 1 - Basis of Presentation
------------------------------

The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial  information  and with the  instructions  to Form 10-QSB of Regulation
S-B.  Accordingly,  they do not include  all of the  information  and  footnotes
required by generally  accepted  accounting  principles  for complete  financial
statements. In the opinion of management,  all adjustments (consisting of normal
recurring  accruals)  considered  necessary  for a fair  presentation  have been
included.  Operating results for the six-month period ended May 31, 2005 are not
necessarily  indicative  of the results  that may be expected for the year ended
November 30, 2005. For further information,  refer to the consolidated financial
statements  and footnotes  thereto  included in our Annual Report on Form 10-KSB
for the year ended November 30, 2004.

Note 2 - Principal Financing Arrangements
-----------------------------------------

On December 17, 2004,  we sold a promissory  note (the "Note") in the  principal
amount of  approximately  $328,767 and 160,000 shares of our  restricted  common
stock to an unaffiliated party for $300,000, of which $32,000 has been allocated
to common  stock  issuances.  The Note is payable on  December  17,  2005 and is
unsecured.  The Note  requires us to spend the proceeds of the Note on sales and
marketing efforts.  We recorded costs of $36,314 in connection with the issuance
of the Note,  which are being amortized over the term of the Note.  Amortization
of these  costs for the six- and  three-month  periods  ended  May 31,  2005 was
$16,515 and $9,153,  respectively,  and was included in our selling, general and
administrative expenses ("SG&A") as financing costs. Amortization of the $32,000
debt  discount  for the six- and  three-month  periods  ended  May 31,  2005 was
$14,553 and $8,065, respectively, and was included in interest expense using the
effective interest method.

On February 8, 2005, we entered into a secured financing arrangement with Laurus
Master Fund, Ltd.  ("Laurus").  The financing  consisted of a $2 million secured
convertible term note (the  "Convertible  Note") that bears interest at the rate
of prime (as published in the Wall Street Journal), plus three percent (9% as of
May 31, 2005), and was initially scheduled to mature on February 8, 2006 but was
subsequently  extended to February 8, 2008. The Convertible  Note is convertible
into  shares of our common  stock at an initial  fixed price of $0.63 per share.
The fixed  conversion  price of the Convertible Note is subject to anti-dilution
protection,  on a weighted-average basis, upon our issuance of additional shares
of our common stock at a price that is less than the fixed conversion price.

In connection with the financing, Laurus was also issued warrants to purchase up
to 793,650 shares of our common stock.  The warrants are exercisable as follows:
264,550  shares at $0.72 per  share;  264,550  shares at $0.79 per share and the
balance  at  $0.95  per  share.  The  underlying   contracts  contained  certain
provisions providing for a cash settlement. EITF 00-19 precludes classifying the
warrants as equity,  as all of the conditions stated in paragraphs 14-32 of EITF
00-19 were not  satisfied.  Accordingly,  the warrants  have been  classified as
debt.  The proceeds of the  Convertible  Note were  allocated  first to the fair
value of the warrants  (liability) and the remainder to the debt instrument.  We
computed the beneficial conversion feature embedded in


                                       5
<PAGE>

the debt instrument using the effective conversion price in accordance with EITF
98-5,  EITF 00-19 and EITF 00-27. We recorded (i) debt discounts of $504,128 for
the valuation of the 793,650 warrants issued with the Convertible Note (computed
using a Black-Scholes model with an interest rate of 2.31%,  volatility of 158%,
zero  dividends  and  expected  term of  seven  years);  (ii)  $705,866  for the
beneficial  conversion  feature  inherent  in the  Convertible  Note;  and (iii)
$106,500 for debt issue costs paid to affiliates of the lender. In addition,  we
issued to Source  Capital Group Inc., an  investment  banking firm,  warrants to
purchase  up to 253,968  shares of our  common  stock as  additional  debt issue
costs.  These warrants were valued at $149,783 using the Black-Scholes  model as
discussed  above.  Total debt  issuance  costs  incurred  to third  parties  for
arranging the financing aggregated $311,287, including the value of the warrants
to  Source  Capital  Group  Inc.  Amortization  of these  costs for the six- and
three-month periods ended May 31, 2005 was $360,290 and $302,841,  respectively,
of which $111,016 and $92,859,  respectively,  was included in SG&A as financing
costs and $249,274 and $209,982, respectively, was included in interest expense.
Discounts are being amortized over one year, the initial term of the Convertible
Note, using the effective  interest method. The warrant liability is adjusted at
each reporting date to fair market value using the  Black-Scholes  model, with a
corresponding charge or credit to income. For six- and three-month periods ended
May 31, 2005, we recorded income of $116,993 and $69,904, respectively.

To secure the payment of all of our  obligations  to Laurus,  we entered  into a
Master  Security  Agreement  that  assigns  and  grants to  Laurus a  continuing
security  interest  in all of the  following  property  now owned or at any time
acquired by us or our  subsidiaries,  or in which any assignor now has or at any
time in the future may  acquire any right,  title or  interest:  all cash,  cash
equivalents, accounts, deposit accounts, inventory, equipment, goods, documents,
instruments (including, without limitation,  promissory notes), contract rights,
general tangibles,  chattel paper, supporting obligations,  investment property,
letter-of-credit  rights,  trademarks,  trademark applications,  patents, patent
applications,  copyrights,  copyright  applications,  and any other intellectual
property,  in each case, in which any assignor now has or may acquire any right,
title or  interest,  all  proceeds  and  products  thereof  (including,  without
limitation,   proceeds  of  insurance)   and  all   additions,   accessions  and
substitutions. In the event any assignor wishes to finance an acquisition in the
ordinary course of business of any hereafter-acquired equipment and has obtained
a commitment from a financing source to finance such equipment from an unrelated
third  party,  Laurus  has  agreed to  release  its  security  interest  on such
hereafter-acquired equipment so financed by such third party financing source.

The Convertible Note is to be repaid using cash or an equity  conversion  option
as follows: we are obligated to make monthly payments to Laurus in the amount of
$60,606,  together  with any accrued and unpaid  interest to date.  By the fifth
business  day prior to each  payment  date,  Laurus may  deliver to us a written
notice  directing that the monthly amount payable on the next payment date shall
be paid in either  shares of common  stock or a  combination  of cash and common
stock.  If a  repayment  notice is not  delivered  by  Laurus  on or before  the
applicable  notice date for any payment  date,  then we are obligated to pay the
monthly amount due in cash. Any portion of the monthly amount paid in cash shall
be paid to Laurus in an amount  equal to 102% of the  principal  portion  of the
monthly  amount due. If Laurus elects to receive all or a portion of the monthly
amount in shares of our common stock,  the number of such shares to be issued by
us will be determined  by dividing the portion of the monthly  amount to be paid
in shares of common stock, by the applicable  fixed conversion  price,  which is
presently $0.63 per share. Payments due May 1, June 1 and July 1, 2005 were made
in cash.


                                       6
<PAGE>

A registration rights agreement was executed requiring us to register the shares
of our  common  stock  underlying  the  Convertible  Note and  warrants  and was
declared effective on June 10, 2005.

Note 3 - Major Customer
-----------------------

During the six- and three-month  periods ended May 31, 2005 and May 31, 2004, no
one customer accounted for more than 10% of revenue.

Note 4 - Income Taxes
---------------------

At November 30, 2004, we had net operating loss carryforwards for Federal income
tax  purposes of  approximately  $20,850,000  expiring in the years 2008 through
2024. There is an annual limitation of approximately $187,000 on the utilization
of approximately  $2,450,000 of such net operating loss carryforwards  under the
provisions of Internal Revenue Code Section 382.

Note 5 - Earnings (Loss) Per Common Share
-----------------------------------------

Basic  earnings  (loss) per common share are  calculated  by dividing net income
(loss) by the weighted  average number of common shares  outstanding  during the
period.  Diluted  earnings per share is calculated by dividing net income by the
sum of the  weighted  average  number  of  common  shares  outstanding  plus all
additional  common  shares  that  would  have been  outstanding  if  potentially
dilutive  securities had been issued unless such inclusion  reduced the loss per
share. A  reconciliation  of the shares used in the computation of our basic and
diluted earnings per common share is as follows:

                                                        Six Months Ended
                                                   May 31, 2005   May 31, 2004
                                                   ------------   ------------
Weighted average common shares outstanding          16,722,359     16,258,730
Dilutive effect of securities                               --        321,985
                                                    ----------     ----------
                                                    16,722,359     16,580,715
                                                    ==========     ==========

                                                        Three Months Ended
                                                   May 31, 2005   May 31, 2004
                                                   ------------   ------------
Weighted average common shares outstanding          16,762,108     16,259,782
Dilutive effect of securities                               --        333,072
                                                    ----------     ----------
                                                    16,762,108     16,592,854
                                                    ==========     ==========

For the six- and three-month periods ended May 31, 2005, approximately 7,900,000
of our stock options, warrants and shares issuable upon the potential conversion
of the Convertible  Note were excluded from the calculation of diluted  earnings
(loss) per share  because the effect  would be anti  dilutive.  For the six- and
three-month  periods  ended May 31, 2004,  approximately  1,700,000 of our stock
options and warrants were excluded from the calculation of diluted  earnings per
share because the effect would be anti dilutive.

Note 6 - Subsidiary's Plan of Reorganization
--------------------------------------------


                                       7
<PAGE>

On July 29, 2002, Telecarrier Services, Inc. ("TSI"), a wholly-owned subsidiary,
had filed a  voluntary  petition  for relief  under  Chapter  11 of the  Federal
Bankruptcy Code in the United States  Bankruptcy Court for the Southern District
of New York.  On April 8,  2004,  the  United  States  Bankruptcy  Court for the
Southern  District  of  New  York  confirmed  a  Plan  of  Reorganization   (the
"Bankruptcy  Plan") for TSI.  The  Bankruptcy  Plan  authorized  us to  disburse
$325,000 to creditors in full  satisfaction of claims amounting to approximately
$1,229,000.  For the year  ended  November  30,  2004,  TSI  reported  a gain of
$904,027 as a result of being judicially released from these claims.

For the six- and  three-month  periods ended May 31, 2004, we reported a gain of
approximately  $904,000  and  $853,000,  respectively,  as  a  result  of  TSI's
settlement with creditors and approximately $161,000 and $41,000,  respectively,
in professional fees. Included in our gain for the six-months ended May 31, 2004
was a gain of  approximately  $51,000,  that  resulted  from a  court-stipulated
reduction in  post-petition  liabilities  (See Note 9). These items are included
under the heading "Reorganization items" in our Condensed Consolidated Statement
of Operations and Comprehensive Income (Loss). No such transactions  occurred in
the six- and three-month periods ended May 31, 2005.


                                       8
<PAGE>

Note 7 - Risks and Uncertainties
--------------------------------

We buy  substantially all of our  telecommunication  services from Regional Bell
Operating Companies ("RBOCs"),  and are, therefore,  highly dependent upon them.
We believe our  relationship  with the RBOCs from which we purchase  services is
satisfactory.  We also believe  there are other  suppliers of  telecommunication
services  in the  geographical  locations  in  which  we  conduct  business.  In
addition,  we are at risk to regulatory  changes that govern the rates we are to
be charged and the  obligations  of the RBOCs to  interconnect  with, or provide
unbundled  network  elements to their  competitors.  The Federal  Communications
Commission  ("FCC") and state public utility  commissions have adopted extensive
rules to implement the  Telecommunications Act of 1996, which sets standards for
relationships   between   communications   providers,   and  they  revisit  such
regulations  on an ongoing  basis in response to the  evolving  marketplace  and
court decisions.  In light of the foregoing, it is possible that the loss of our
relationship  with the primary RBOC that  supplies us with  wholesale  telephone
services or a significant unfavorable change in the regulatory environment would
have a severe near-term impact on our ability to conduct our  telecommunications
business.  In order to reduce regulatory risks going forward, our main operating
subsidiary has signed a commercially  negotiated  wholesale  services  agreement
with two of the RBOCs.

Future  results  of  operations  involve a number  of risks  and  uncertainties.
Factors  that could  affect  future  operating  results and cash flows and cause
actual results to vary materially from historical  results include,  but are not
limited to:

      -     Our  business  strategy  with  respect  to  bundled  local  and long
            distance services may not succeed.

      -     Our business  strategy with respect to Voice over Internet  Protocol
            ("VoIP") may not succeed.

      -     Failure  to  manage,  or  difficulties  in  managing,   our  growth,
            operations  or  restructurings  including  attracting  and retaining
            qualified  personnel and opening up new  territories for our service
            with favorable gross margins.

      -     Dependence on the  availability or  functionality of incumbent local
            telephone  companies'  networks,  which we  purchase  on a wholesale
            basis and resell.

      -     Dependence on third party companies to process call records from our
            customers and provide billing services.

      -     Increased price competition in local and long distance service.

      -     Failure or interruption in our network and information systems.

      -     Changes in government policy, regulation and enforcement.

      -     Failure of our  collection  management  system  and credit  controls
            efforts for customers.

      -     Inability to adapt to technological change.

      -     Competition in the telecommunications industry.

      -     Inability to manage customer attrition and bad debt expense.


                                       9
<PAGE>

      -     Adverse change in our relationship with third party carriers.

      -     Failure or bankruptcy  of other  telecommunications  companies  upon
            whom we rely for services and revenues.

      -     Lack of capital or  borrowing  capacity,  and  inability to generate
            cash flow.

      -     Inability to launch our VoIP telephony product, the success of which
            may be dependent upon a variety of factors, including scalability of
            our systems, product and feature selection, timely implementation of
            new  products,   product  performance,   implementation  of  service
            features  mandated  by  federal  and state  laws,  effectiveness  of
            promotional  efforts,  cost  effectiveness  of  our  products,   and
            appropriate identification of market demand for our existing and new
            products.


Because of the  unexpected  level of losses that we have incurred in the current
year,  combined  with  other  factors,  including,  but not  limited  to (1) the
significant use of our cash resources  during the current year, (2) our negative
working capital,  and (3) our negative  shareholders  equity as of May 31, 2005,
our ability to continue as a going concern is dependent upon factors  including,
but not  limited to (1) our  ability  to  improve  our  operating  results,  (2)
generate  sufficient  cash from our  businesses to meet our  obligations as they
become  due,  and  (3)  raise  additional  cash  through  borrowings  or  equity
financing. We anticipate that we will be able to raise cash through the exercise
of our stock warrants in Talk, and, we are  negotiating  with lenders to provide
additional  financing.  There  can be no  assurance  that  we  will  be  able to
successfully accomplish these objectives.

Note 8 - Stock-Based Compensation Plans
---------------------------------------

We issue  stock  options to our  employees  and  outside  directors  pursuant to
stockholder-approved  and non-approved stock option programs. We account for our
stock-based  compensation  plans under the intrinsic value method of accounting,
as defined by Accounting  Principles Board Opinion No. 25,  Accounting for Stock
Issued to  Employees,  and  related  interpretations.  No  stock-based  employee
compensation  cost was  reflected  in net income for the six- and three-  months
ended May 31,  2005 and 2004,  as all options  granted  under these plans had an
exercise price equal to the fair market value of the underlying  common stock on
the date of the grant.  For pro forma  disclosures,  the estimated fair value of
the option was amortized  over the vesting  periods,  which range from immediate
vesting to three years. The following table illustrates the affect on net income
(loss) per share if we had  accounted  for our stock  option and stock  purchase
plans under the fair value  method of  accounting  under  Statement of Financial
Accounting   Standards   ("SFAS")   No.   123,   "Accounting   for   Stock-Based
Compensation",   as  amended  by  SFAS  No.  148,  "Accounting  for  Stock-Based
Compensation - Transition and Disclosure":

<TABLE>
<CAPTION>

                                         For the Six Months Ended       For the Three Months Ended
                                        May 31, 2005   May 31, 2004     May 31, 2005   May 31, 2004
                                        ------------   ------------     ------------   ------------
<S>                                     <C>               <C>           <C>               <C>
Net income (loss) as reported           ($1,742,732)      $864,604      ($1,341,047)      $808,464
Deduct: Total stock-based employee
    compensation expense determined
    under fair value-based method
    for all awards, net of related
    tax effects                            (200,329)      (112,131)        (100,902)       (55,785)
                                        -----------    -----------      -----------    -----------
Pro forma net income (loss)             ($1,943,061)      $752,473      ($1,441,949)     ($752,679)
                                        -----------    -----------      -----------    -----------
Earnings (loss) per share
  Basic, as reported                         ($0.10)          $.05           ($0.08)          $.05
  Basic, pro forma                           ($0.12)          $.05           ($0.09)          $.05


  Diluted, as reported                       ($0.10)          $.05           ($0.08)          $.05
  Diluted, pro forma                         ($0.12)          $.05           ($0.09)          $.05

</TABLE>

Note 9 - Related Party Transactions
-----------------------------------


                                       10
<PAGE>

TSI had an  agreement,  effective  January 2, 2002,  with Telco  Services,  Inc.
("Telco"),  a  corporation  owned by a former  shareholder,  under  which  Telco
provided  TSI with  collection,  sales  and  other  services.  As a result  of a
court-stipulated  agreement  between TSI and Telco,  entered into on February 6,
2004,  the amount  owed Telco for such  services  was  reduced by  approximately
$51,000.  Such  reduction was reported as a gain for the six-month  period ended
May 31, 2004 (See Note 6).

During the six- and  three-month  periods  ended May 31, 2005,  we billed Cordia
Corporation ("Cordia"), a related party, $40,851 and $17,449,  respectively, for
telecommunications  services,  commissions and other costs, and Cordia billed us
$350,846 and $181,535,  respectively,  for telecommunications  services, billing
services and other sundry costs.  During the six- and three-month  periods ended
May 31,  2004,  we  billed  Cordia,  $298,030  and  $88,934,  respectively,  for
telecommunications  services,  commissions and other costs, and Cordia billed us
$379,996 and $101,513,  respectively,  for telecommunications  services, billing
services and other sundry costs. As of May 31, 2005, we owed Cordia $74,876.

Note 10 - Reclassification
--------------------------

Certain 2004 amounts related to the bankruptcy of TSI have been  reclassified to
conform to the 2005 presentation.

Note 11 - Defined Benefit Plan
------------------------------

We sponsor a defined benefit plan covering two active  employees and a number of
former employees. Our funding policy with respect to the defined benefit plan is
to contribute  annually not less than the minimum required by applicable law and
regulation to cover the normal cost and to fund supplemental costs, if any, from
the date each  supplemental  cost was  incurred.  Contributions  are intended to
provide  not only for  benefits  attributable  to service to date,  but also for
those expected in the future.

For the six- and  three-month  periods  ended May 31, 2005 and 2004, we recorded
pension expense of $48,000 and $24,000 for each fiscal period. For the six-month
periods  ended May 31,  2005 and  2004,  we  contributed  $25,000  and  $26,000,
respectively, to our defined benefit plan. We expect to contribute an additional
$75,000 to our defined  benefit plan in  remainder  of fiscal 2005.  The current
investment  strategy for the defined  benefit plan is to invest in  conservative
debt and equity securities. The expected long-term rate of return on plan assets
is 8%.


                                       11
<PAGE>

Item 2.  Management's Analysis and Discussion or Plan of Operation
------   ---------------------------------------------------------

      The statements  contained in this Report that are not historical facts are
"forward-looking  statements"  within  the  meaning  of the  Private  Securities
Litigation Reform Act of 1995 with respect to our financial  condition,  results
of   operations   and   business,   which  can  be  identified  by  the  use  of
forward-looking   terminology,   such  as  "estimates,"   "projects,"   "plans,"
"believes,"  "expects,"  "anticipates,"  "intends,"  or the negative  thereof or
other variations  thereon,  or by discussions of strategy that involve risks and
uncertainties.  Management  wishes to caution the reader of the  forward-looking
statements,  that such statements,  which are contained in this Report,  reflect
our current  beliefs with respect to future events and involve known and unknown
risks, uncertainties and other factors, including, but not limited to, economic,
competitive,  regulatory,  technological,  key  employee,  and general  business
factors affecting our operations,  markets, growth, services, products, licenses
and  other  factors  discussed  in our other  filings  with the  Securities  and
Exchange   Commission,   and  that  these   statements  are  only  estimates  or
predictions.  No assurances  can be given  regarding the  achievement  of future
results, as actual results may differ materially as a result of risks facing us,
and actual events may differ from the assumptions underlying the statements that
have been made regarding  anticipated events.  Factors that may cause our actual
results, performance or achievements,  or industry results, to differ materially
from those  contemplated by such  forward-looking  statements  include,  without
limitation:  (1) the availability of additional funds to successfully pursue our
business plan; (2) the impact of changes the Federal  Communications  Commission
or State Public Service Commissions may make to existing  telecommunication laws
and  regulations,  including  laws  dealing  with  Internet  telephony;  (3) the
cooperation of incumbent carriers that have signed a wholesale service agreement
with us to replace the unbundled network elements  platform;  (4) our ability to
maintain,  attract and integrate internal management,  technical information and
management  information  systems;  (5) our  ability  to market our  services  to
current  and new  customers  and  generate  customer  demand for our product and
services  in the  geographical  areas in which we  operate;  (6) our  success in
gaining regulatory approval to access new markets;  (7) our ability to negotiate
and maintain suitable  interconnection  agreements with the incumbent  carriers;
(8) the  availability  and  maintenance of suitable vendor  relationships,  in a
timely manner,  at reasonable  cost; (9) the intensity of competition;  and (10)
general  economic  conditions.  All written and oral forward looking  statements
made in  connection  with this  Report  that are  attributable  to us or persons
acting  on our  behalf  are  expressly  qualified  in  their  entirety  by these
cautionary  statements.  Given the uncertainties  that surround such statements,
prospective  investors  are  cautioned  not to  place  undue  reliance  on  such
forward-looking statements.

Overview

eLEC Communications Corp. is a telecommunications  service holding company, with
operations in three wholly-owned  subsidiaries,  of which two subsidiaries focus
on delivering integrated telephone service by leasing landlines as a competitive
local exchange  carrier  ("CLEC") and one subsidiary  focuses on delivering such
services by utilizing  high-speed Internet connections to provide VoIP services.
We offer  small  businesses  and  residential  consumers  an  integrated  set of
telecommunications  products  and  services,  including  local  exchange,  local
access,  domestic and international  long distance  telephone,  VoIP, and a full
suite of features and calling  plans.  More  recently,  we began  operating as a
facilities-based   VoIP  carrier  for  other  VoIP  companies,   as  we  provide
origination and  termination of VoIP traffic as a service to other carriers.  To
date, VoIP revenues have not been significant.


                                       12
<PAGE>

       Our  VoIP  service  is  provided  by  a  wholly-owned   subsidiary,   VoX
Communications  Corp. ("VoX"). VoX owns proprietary source code and a softswitch
that  enables it to provide more than 20 Class 5 call  features,  voice mail and
enhanced call handling on its own Session  Initiation  Protocol  ("SIP")  server
suite. Our SIP servers are part of a cluster of servers,  which we refer to as a
server farm, in which each server performs  different  network tasks,  including
back-up and  redundant  services.  We believe the server farm  structure  can be
easily and  cost-effectively  scaled as our VoIP business grows.  Also,  servers
within our server farm can be assigned  different tasks as demand on the network
dictates.  If a server  goes down,  our server farm is designed in a manner that
subscribers  should not have a call  interrupted.  VoX supports  origination and
termination using both the G.711 and G.729 voice codecs.  Our research indicates
that  approximately  90% of the VoIP traffic in the United  States is carried at
G.711, and therefore, for our wholesale customers who have already established a
VoIP  business  that uses G.711,  we provide  this  service.  For our own retail
customers and for the  technologically-advanced  wholesale accounts,  we use the
more efficient G.729 codec,  which utilizes  significantly less bandwidth in the
transmission of voice services.

We believe our server farm  provides us a superior  approach to providing  voice
services  over the  Internet  because it  requires  significantly  less  capital
expenditures than other VoIP strategies.  Our equipment expenditures required to
build one server farm, which we project will carry 10,000  subscriber lines, are
less than  $100,000.  We  believe  our  server  farm  approach  will  provide us
significant  capital savings when compared to other VoIP carriers that typically
purchase  one large  switch for more than $2 million  and then seek to market to
consumers  as  quickly  as  possible  to  bring  the  switch  to  an  acceptable
utilization level. We also believe our approach is significantly better than the
traditional  telecom  approach that required  hundreds of millions of dollars in
capital expenditures in order to build a network.

Plan of Operation

When we lease landlines in our CLEC business, we utilize the network of an RBOC.
We are dependent on the RBOC for significant operational items such as access to
its back-office  support systems,  repair  functions and switching  functions in
order to provide  our  customers  with  Plain Old  Telephone  Service  ("POTS").
Although we have been able to successfully provide POTS lines, and we believe we
can continue to do so, we also believe  there is greater value in operating as a
facilities-based VoIP carrier, in which case we will no longer be dependent upon
the RBOC, and other carriers will depend on us to carry their traffic. Beginning
in the second  quarter of fiscal 2005,  we have focused a greater  amount of our
corporate  resources on the development and implementation of our VoIP platform.
We plan to continue this focus throughout the remainder of the fiscal year.

While we plan to continue to lease lines from the RBOCs, and anticipate that the
wholesale service agreements we have with the RBOCs will allow us to continue to
obtain an acceptable gross margin on the POTS services we provide,  our customer
acquisition  focus going  forward  will be to acquire more lines on our own VoIP
platform  rather  than on the  platform we lease from the RBOCs.  We  anticipate
that, given our limited financial resources, we will spend more of our marketing
budget to attract VoIP  customers  than POTS customers and that the total number
of POTS lines in our subscriber  base will be decreasing as our VoIP  subscriber
lines experience  growth.  Various industry  groups,  such as the  International
Packet Communications  Consortium,  continue to predict that billions of minutes
will be  transferring  from  traditional  telecom routes to VoIP in the next two
years. We plan to take advantage of that transformation and capture as many VoIP
minutes as possible for VoX.


                                       13
<PAGE>

Six Months Ended May 31, 2005 vs. Six Months Ended May 31, 2004
---------------------------------------------------------------

Our  revenue  for  the  six-month   period  ended  May  31,  2005  increased  by
approximately  $4,909,000, or approximately 130%, to approximately $8,679,000 as
compared to approximately $3,770,000 reported for the six-month period ended May
31,  2004.  The growth in  revenues  was  directly  related to the growth in the
number of local access lines that we served in our CLEC  customer  base.  In the
future, we anticipate spending more money on VoIP line acquisition costs than on
CLEC line acquisition  costs. Given our limited experience in acquiring new VoIP
customers, we are unable to anticipate if we can maintain the quarter-to-quarter
sales growth that we experienced in prior quarters. While the addition of two or
three large wholesale VoIP accounts could  potentially  account for thousands of
new  subscriber  lines,  these  lines may not all be added in the same  month or
quarter.

Our gross  profit for the  six-month  period  ended May 31,  2005  increased  by
approximately   $2,152,000  to  approximately   $4,125,000  from   approximately
$1,973,000  reported in the six-month period ended May 31, 2004. During the same
fiscal periods,  our gross profit percentage  decreased to 47.5% from 52.3%. The
increase in gross profit  resulted from the increase in our customer base in the
first half of fiscal 2005 over the first half of fiscal  2004.  The  decrease in
our gross profit percentage during the 2005 period resulted from the higher cost
of services that we are now incurring  under our  wholesale  services  agreement
with  Verizon,  as  compared  to the  costs we  previously  incurred  under  the
Unbundled  Network Elements Platform  ("UNE-P")  service  offering.  Our selling
strategy  in fiscal  2005 is to  continue  to  penetrate  states  that offer the
opportunity  to achieve  gross  margins that are higher than 40%. We  anticipate
that our VoIP product will also be able to yield gross margins in excess of 40%.

SG&A  increased  by  approximately   $3,790,000,   or  approximately   195%,  to
approximately  $5,730,000  for the  six-month  period  ended  May 31,  2005 from
approximately $1,940,000 reported in prior year fiscal period. Of this increase,
approximately  $2,086,000 was for bad debt expense,  approximately  $507,000 was
for  telemarketing  costs,   approximately   $171,000  was  for  billing  costs,
approximately  $128,000 was for financing costs (See Note 2), and  approximately
$472,000 was for increased personnel costs, of which approximately  $170,000 was
related to VoX. From January 2005 until  approximately the middle of April 2005,
our CLECs  attracted an unusually high number of residential  consumers that did
not pay our invoices,  and for which we subsequently  terminated services,  even
though such customers had respectable credit scores. Although growth tends to be
easier in the residential market than in the business market, we are now selling
approximately 75% of our new CLEC lines to business customers, who we have found
are better at paying  their  monthly  telephone  bills.  We are also  allocating
significantly  less marketing dollars to new CLEC line acquisition  costs. Going
forward,  we do not anticipate the  continuation  of this high percentage of bad
debt  expense  with our CLEC  customers,  as the  residential  customers  we are
accepting  from outside  marketing  agencies  must be credit worthy and must pay
their  first  bill in  order  for the  marketing  company  to  receive  its full
commission.  With our VoIP customers,  we anticipate almost no bad debt expense,
as we require credit card payment from our  residential  VoIP users,  and all of
our wholesale  accounts are credit  checked and required to pay us a deposit for
future  services.  We also believe VoIP customers will generate a  significantly
lower bad debt percentage  because they tend to be more  sophisticated  Internet
users that are already paying for a broadband connection.

Depreciation  expense decreased to approximately $3,000 for the six-month period
ended May 31, 2005 as compared to approximately  $8,000 for the six-month period
ended May 31, 2004.


                                       14
<PAGE>

Although VoIP revenues have been insignificant to date and we are confident that
our VoIP platform is functional,  we have not yet begun the  amortization of the
capitalized  costs of  approximately  $380,000  of our VoIP  platform as we were
still  considered to be in the development and testing stage at May 31, 2005. In
June 2005, we began running live wholesale customers on our VoIP platform and we
plan to transfer all of our retail  customers from our test platform to our live
platform during the third quarter. We therefore anticipate that we will begin to
amortize the costs of our VoIP platform in the third quarter of fiscal 2005.

Interest expense increased by approximately  $312,000 to approximately  $316,000
for the six-month period ended May 31, 2005 as compared to approximately  $4,000
for the six-month period ended May 31, 2004, as a result of increased borrowings
under our financing agreements (See Note 2).

Interest and other income decreased by approximately  $16,000,  to approximately
$35,000 for the six-month period ended May 31, 2005 as compared to approximately
$51,000 for the  six-month  period  ended May 31, 2004.  The  decrease  resulted
primarily from a reduction in commission income.

For the six-month period ended May 31, 2005, we recorded income of approximately
$117,000,  which  resulted  from the change in the market  value of the warrants
issued to Laurus as part of the Laurus  financing  (See Note 2). No such  income
was recorded in the six-month period ended May 31, 2004.

For the  six-month  periods ended May 31, 2005 and 2004, we recorded gain on the
sale of investment securities and other investments of approximately $30,000 and
$1,000, respectively, resulting from the sale of investment securities.

For the  six-month  period ended May 31, 2004,  we reported a gain on settlement
with  creditors  of  approximately  $904,000,   which  was  in  part  offset  by
approximately $161,000 in professional fees (See Note 6).

For the  six-month  period  ended May 31,  2004,  we  recorded a tax  benefit of
$48,000,  which resulted from the reduction of an estimated accrual of corporate
tax expense for fiscal 2003.  No such  benefit was  recorded  for the  six-month
period ended May 31, 2005.

Three Months Ended May 31, 2005 vs. Three Months Ended May 31, 2004
-------------------------------------------------------------------

Our  revenue  for the  three-month  period  ended  May  31,  2005  increased  by
approximately  $2,919,000, or approximately 154%, to approximately $4,815,000 as
compared to approximately  $1,896,000  reported for the three-month period ended
May 31, 2004.  The growth in revenues was directly  related to the growth in the
number of local access lines served by our CLEC  customer  base.  We  anticipate
that revenues will not reach $4,815,000 for our third quarter.  As we manage the
launch of our VoIP platform,  we expect to use funds that previously  would have
been used to maintain  or grow our CLEC  customer  base to pay for the  expenses
associated with launching our VoIP operation.  Although we have begun to sign up
VoIP  customers  in the third  fiscal  quarter,  we do not  believe the new VoIP
accounts will generate  revenues  quickly  enough in the third quarter to offset
the  decrease  in CLEC POTS  lines that will occur  from  normal  attrition.  In
addition to regular  customer churn to other  companies that compete with us for
POTS line service,  we are  experiencing an increasing  number of customers that
disconnect  service as they have decided to use only a cell phone or a VoIP line
in lieu of a POTS  line.  We plan to notify


                                       15
<PAGE>

our POTS line  customer  base of the  availability  of our VoIP  services  in an
effort to  encourage  our good CLEC  customers  to transfer  to VoX,  instead of
looking to another VoIP carrier.

Our gross  profit for the  three-month  period  ended May 31, 2005  increased by
approximately $1,338,000 to approximately $2,317,000 from approximately $979,000
reported in the  three-month  period ended May 31, 2004.  During the same fiscal
periods, our gross profit percentage decreased to 48.1% from 51.7%. The increase
in our gross profit  resulted  from the increase in our customer  base in second
quarter of fiscal 2005 over the second  quarter of fiscal 2004.  The decrease in
our gross profit percentage during the 2005 period resulted from the higher cost
of services that we are now incurring  under our  wholesale  services  agreement
with Verizon,  as compared to the costs we previously  incurred  under the UNE-P
service offering.  As discussed above, our selling strategy in fiscal 2005 is to
continue to penetrate  states that offer the  opportunity  to achieve POTS gross
margins that are higher than 40%. We anticipate  that our VoIP product will also
be able to yield gross margins in excess of 40%.

SG&A  increased  by  approximately   $2,506,000,   or  approximately   250%,  to
approximately  $3,509,000  for the  three-month  period  ended May 31, 2005 from
approximately $1,003,000 reported in prior year fiscal period. Of this increase,
approximately  $1,354,000 was for bad debt expense,  approximately  $360,000 was
for  telemarketing   costs,   approximately   $97,000  was  for  billing  costs,
approximately  $102,000 was for financing costs (See Note 2), and  approximately
$260,000 was for increased personnel costs, of which  approximately  $99,000 was
related to VoX. In the third quarter of fiscal 2005, we anticipate our CLEC line
acquisition  costs and our bad debt expense to be  substantially  lower than the
second quarter  figures,  as we have adjusted how we market to  potentially  new
customers and are spending  fewer dollars on attracting new CLEC  customers.  We
believe the VoIP  customers,  for which we require a credit  card on file,  will
generate  very  little  bad  debt  expense,  and  we  are  looking  to  have  an
increasingly  large percentage of our new line  acquisitions to be VoIP accounts
in lieu of POTS line customers.  VoIP wholesale customers,  which could generate
significant revenues, are required to be credit checked and to pay a deposit.

Depreciation  expense  decreased  to  approximately  $2,000 for the  three-month
period  ended  May  31,  2005  as  compared  to  approximately  $4,000  for  the
three-month  period ended May 31, 2004.  Although we have limited VoIP  revenues
and are confident that our VoIP platform is  functional,  we have not started to
amortize the capitalized costs of our VoIP platform as we are still in the final
testing stages. We anticipate that our final live platform,  which is co-located
in a major data  center,  will be  launched  during the third  quarter of fiscal
2005.

Interest expense increased by approximately  $264,000 to approximately  $265,000
for the  three-month  period  ended May 31, 2005 as  compared  to  approximately
$1,000 for the  three-month  period ended May 31, 2004, as a result of increased
borrowings under our recent financing agreements (See Note 2).

Interest and other income  decreased by approximately  $4,000,  to approximately
$18,000  for  the  three-month   period  ended  May  31,  2005  as  compared  to
approximately  $22,000  for the  three-month  period  ended  May 31,  2004.  The
decrease resulted primarily from a reduction in commission income.

For  the  three-month   period  ended  May  31,  2005,  we  recorded  income  of
approximately  $70,000 related to the change in the market value of the warrants
issued to Laurus as part of the Laurus


                                       16
<PAGE>

financing  (See Note 2). No such income was recorded in the  three-month  period
ended May 31, 2004.

For the three-month periods ended May 31, 2005 and 2004, we recorded gain on the
sale of investment securities and other investments of approximately $30,000 and
$1,000, respectively, resulting from the sale of investment securities.

For the three-month  period ended May 31, 2004, we reported a gain on settlement
with  creditors  of  approximately  $853,000,   which  was  offset  in  part  by
approximately $41,000 in professional fees (See Note 6).

Liquidity and Capital Resources
-------------------------------

At May 31, 2005, we had cash and cash equivalents of approximately  $491,000 and
negative working capital of approximately $2,700,000.

Net cash used in operating activities  aggregated  approximately  $1,663,000 and
$451,000 in the six-month periods ended May 31, 2005 and 2004, respectively. The
principal  use  of  cash  in  fiscal  2005  was  the  loss  for  the  period  of
approximately  $1,743,000.  The principal use of cash in fiscal 2004 was the net
change in operating  assets and  liabilities,  which was partially offset by the
income for the period of approximately $865,000.

Net cash used in investing  activities  in the  six-month  periods ended May 31,
2005 and 2004 aggregated  approximately $213,000 and $7,000,  respectively.  The
principal  use of cash in fiscal 2005 was the  expenditures  related to our VoIP
initiative of approximately $223,000, which was partially offset by the proceeds
of the sale of investments of approximately  $15,000.  The principal use of cash
in fiscal 2004 was for the purchase of equipment and investment securities.

Net cash provided by (used in)  financing  activities  aggregated  approximately
$1,995,000  and ($4,000) in the  six-month  periods ended May 31, 2005 and 2004,
respectively. In fiscal 2005, net cash provided by financing activities resulted
from the  proceeds  of  short-term  and  long-term  notes,  warrants  and  stock
issuances  and the  exercise of stock  options in the  amounts of  approximately
$2,018,000  and  $37,500,  respectively,  which  was  partially  offset  by debt
repayment of approximately  $61,000.  In fiscal 2004, net cash used in financing
activities resulted from the repayment of debt.

For the six-month  period ended May 31, 2005, we had  approximately  $223,000 in
capital expenditures primarily related to our VoIP initiative. We expect to make
equipment purchases of approximately  $50,000 to $75,000 in the third quarter of
fiscal 2005. We expect that other capital  expenditures  over the next 12 months
will relate primarily to a continued  roll-out of VoIP services and will only be
required to support a growing customer base of VoIP subscribers.

We have stock purchase warrants that entitle us to purchase approximately 95,000
shares of Talk America  Holdings Inc.  ("Talk").  The warrant  exercise price is
$6.30 per share and, at July 1, 2005,  our warrants were  in-the-money,  as Talk
common  stock was trading at  approximately  $10.21 per share at such date.  The
warrants  expire  on August 9, 2005 and we plan to  exercise  them  before  they
expire.  Talk has notified us that it plans to file a registration  statement in
July 2005 to register the shares underlying our warrants.  It will be helpful to
us  in  exercising  the  warrants  and  selling  the  underlying  stock  if  the
registration  statement is declared  effective,  by the  Securities and Exchange
Commission, before our warrants expire.


                                       17
<PAGE>

While we have  reported  profits  in the last two  fiscal  years,  we have  also
sustained net losses from operations during those periods,  as we have worked to
build our customer base. Our operating  losses have been funded through the sale
of non-operating  assets,  the issuance of equity securities and borrowings.  We
believe that current cash and cash  equivalents may not be sufficient to finance
our  operations  through at least the next twelve  months.  We will  continue to
evaluate  our cash  needs and growth  opportunities  and we  anticipate  seeking
additional  equity or debt  financing  in order to achieve our overall  business
objectives. There can be no assurance that such financing will be available, or,
if available,  at a price that would be  acceptable  to us.  Failure to generate
sufficient  revenues,  raise additional capital or reduce certain  discretionary
spending could have an adverse impact on our ability to achieve our  longer-term
business objectives.

Item 3.  Controls and Procedures
------   -----------------------

      Disclosure  Controls and Procedures.  We maintain  disclosure controls and
procedures  designed to ensure that information  required to be disclosed in our
reports under the  Securities  Exchange Act of 1934,  as amended (the  "Exchange
Act"), is recorded,  processed,  summarized and reported within the time periods
specified in the Exchange  Act, and that such  information  is  accumulated  and
communicated  to our  management,  including our chief  executive  officer/chief
financial officer,  as appropriate to allow timely decisions  regarding required
disclosure.  In designing and evaluating the disclosure controls and procedures,
management  recognized  that any  controls  and  procedures,  no matter how well
designed and operated,  can provide only  reasonable  assurance of achieving the
desired control objectives, and management necessarily was required to apply its
judgment in evaluating the  cost-benefit  relationship of possible  controls and
procedures.

In  connection  with the  completion  of its audit of,  and the  issuance  of an
unqualified report on, our consolidated financial statements for the fiscal year
ended November 30, 2004, our  independent  auditors,  Nussbaum Yates and Wolpow,
P.C.  ("NYW"),  communicated to our Audit  Committee that the following  matters
involving our internal controls and operations were considered to be "reportable
conditions", as defined under standards established by the American Institute of
Certified Public Accountants or AICPA:

      o     Lack of  quantity of staff,  which led to issues  related to lack of
            segregation  of  duties,   inadequate  supervision,   timeliness  of
            financial reporting and year end closing process; and

      o     Lack of quantity of staff, which led to issues related to the timely
            preparation and filing of municipal telecommunications tax returns.

      o     Lack  of  quantity  of  staff,  which  led  to  tax  payments  being
            classified   as   cost  of   services   and  an   overstatement   of
            telecommunications taxes payable.

Reportable  conditions  are matters  coming to the attention of our  independent
auditor that, in its judgment,  relate to significant deficiencies in the design
or operation  of internal  controls  and could  adversely  affect our ability to
record,  process,  summarize  and  report  financial  data  consistent  with the
assertions  of  management in the  financial  statements.  In addition,  NYW has
advised us that it considers the first matter noted above,  which relates to the
lack of a segregation of duties,  to be a "material  weakness" that may increase
the possibility that a material


                                       18
<PAGE>

misstatement in our financial  statements  might not be prevented or detected by
our employees in the normal course of performing their assigned functions.

As  required  by SEC Rule  13a-15(b),  we carried  out an  evaluation  under the
supervision and with the  participation  of our management,  including our chief
executive  officer/chief  financial officer,  of the effectiveness of the design
and  operations  of  our  disclosure  controls  and  procedures.  Based  on  the
foregoing,  our chief executive  officer/chief financial officer determined that
the  deficiencies  identified  by NYW could cause our  disclosure  controls  and
procedures  to be less  effective  at a  reasonable  assurance  level  than  was
desirable.   However,  we  are  actively  seeking  to  remedy  the  deficiencies
identified  herein,  including hiring additional staff to assure  segregation of
duties,  additional review procedures and, timeliness of financial reporting, as
well as preparing and filing  telecommunications tax returns on a monthly basis,
instead  of  quarterly  or  semi-annually.  Our  chief  executive  officer/chief
financial  officer  did not note any  other  material  weakness  or  significant
deficiencies in our disclosure  controls and procedures  during this evaluation.
We  continue  to improve  and  refine our  internal  controls.  This  process is
ongoing.  In June 2005 we hired an  additional  staff member for our  accounting
department  to address  the  segregation  of duties  issues and to help with tax
filings.

      Internal  Control  Over  Financial  Reporting.  Other than for the matters
discussed  above,  our  chief  executive  officer/chief  financial  officer  has
determined  that our internal  controls and procedures  were effective as of the
end of the period covered by this report.  Other than as described below, during
fiscal 2005,  there were no  significant  changes in our  internal  control over
financial  reporting  or in  other  factors  that  materially  affected,  or are
reasonably  likely to materially  affect,  our internal  controls over financial
reporting.

      During  fiscal year 2004,  we reported  that we had been  overstating  our
telecommunications  taxes  payable for certain taxes we had paid directly to our
carrier.  We have  changed  the way we  analyze  our  carrier  bills and our tax
liability  accounts so that both our cost of services and taxes payable accounts
are not overstated,  and we have enhanced the training of personnel  involved in
the various  processes.  We believe these actions have  remediated  the reported
deficiency.

      We hired an additional  accountant for our  accounting  department in June
2005.  We  believe  this  action  has  helped  us  address  issues  relating  to
segregation of duties and tax filings,  but we are still  assessing  whether the
steps we have taken in  conjunction  with this action is enough to remediate the
reported deficiencies.


                                       19
<PAGE>

                            eLEC COMMUNICATIONS CORP.
                            -------------------------
                            PART II-OTHER INFORMATION
                            -------------------------

Item 1.     Legal Proceedings
-------     -----------------

            None

Item 2.     Changes in Securities and Purchases of Equity Securities
-------     --------------------------------------------------------

            In May 2005,  we issued an aggregate of 20,000  shares of our common
            stock in conjunction  with the exercise of options granted under our
            Employee  Stock Option Plan, as amended.  Such shares were issued in
            reliance upon the exemption  from  registration  provided by Section
            4(2) of the  Securities  Act of 1933, as amended,  on the basis that
            such issuance did not involve a public offering, no underwriter fees
            or commissions  were paid in connection  with such issuance and such
            person was an `accredited investor' as defined in Regulation D under
            the Securities Act of 1933, as amended.

Item 3.     Defaults Upon Senior Securities
-------     -------------------------------

            None

Item 4.     Submission of Matters to a Vote of Security Holders
-------     ---------------------------------------------------

            The 2005 Annual Meeting of Shareholders  (the "2005 Annual Meeting")
            was duly held on June 15, 2005.  All director  nominees to the Board
            of Directors were duly elected at the 2005 Annual Meeting. Set forth
            below is a brief  description of each other matter voted upon at the
            2005 Annual  Meeting  and the  results of vote with  respect to each
            matter.

                  (i)   The approval  and adoption of our 2004 Equity  Incentive
                        Plan.

                          Votes For .........    4,759,723
                          Votes Against .....      256,934
                          Votes Abstaining ..           --
                          Non-Vote ..........   10,194,160

                  (ii)  Ratification  of the  appointment  of  Nussbaum  Yates &
                        Wolpow, P. C. as our auditors.

                          Votes For .........   15,155,550
                          Votes Against .....       33,664
                          Votes Abstaining ..       37,360

Item 5.     Other Information
-------     -----------------

            None

Item 6.     Exhibits
-------     --------


                                       20
<PAGE>

            31.1  Certification  of  our  Chief  Executive   Officer  and  Chief
                  Financial  Officer,  Paul H. Riss,  Pursuant to 18 U.S.C. 1350
                  (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 18 U.S.C. 1350
                  (Section 906 of the Sarbanes-Oxley Act of 2002)


                                       21
<PAGE>

Signatures
----------

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned hereunto duly authorized.

                                               eLEC Communications Corp.



July 15, 2005                                  By:  /s/ Paul H. Riss
-------------                                       ----------------------------
Date                                                    Paul H. Riss
                                                        Chief Executive Officer
                                                        (Principal Financial and
                                                         Accounting Officer)


                                       22