SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-QSB

(Mark One)

[ X ]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 1997

                                       OR

[   ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
        EXCHANGE ACT OF 1934

                  For the transition period from ____________ to __________


                         Commission File Number 1-13764 


                        ELECTRONICS COMMUNICATIONS CORP. 
              ----------------------------------------------------
             (Exact name of registrant as specified in its charter)



          Delaware                                         11-2649088
--------------------------------------------------------------------------------
(State or other jurisdiction of                        (I.R.S. Employer 
incorporation or organization)                         Identification Number) 


         10 Plog Road
     Fairfield, New Jersey                                    07004
----------------------------------------                    ----------
(Address of principal executive offices)                    (Zip Code)


Registrant's telephone number, including area code:  (201) 808-8862   
 
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 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 [   ].

         The number of shares of the registrant's  common stock (     par value)
outstanding as of          , was         .
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES 

                                      INDEX


        PART 1.     FINANCIAL INFORMATION (UNAUDITED)                           

        Item 1.     Consolidated Condensed Financial Statements

                    Consolidated Condensed Balance Sheets
                    June 30, 1997, March 31, 1997 and December 31, 1996      

                    Consolidated Condensed Statements of Operations
                    for the three months ended June 30, 1997 and 1996   

                    Consolidated Condensed Statements of Cash Flows
                    for the three months ended June 30, 1997 

                    Consolidated Condensed Statements of Changes in 
                    Stockholders' Equity for the three months ended
                    June 30, 1997                        

                    Notes to Consolidated Condensed Financial Statements        


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



        PART II.    OTHER INFORMATION                                           

                    Signature page                                              


<PAGE>
<TABLE>
<CAPTION>
                              ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                                         CONSOLIDATED BALANCE SHEETS


                                                      ASSETS

                                                             JUNE 30,         MARCH 31,        DECEMBER 31,
                                                         ------------      ------------      -------------- 
                                                               1997              1997              1996
                                                          (UNAUDITED)       (UNAUDITED)
<S>                                                      <C>               <C>               <C>
CURRENT ASSETS
  Cash .............................................     $     23,447      $     48,620      $    179,188
  Accounts Receivable
    (Net of $508,400 Allowance for Doubtful Accounts
    at June 30, 1997,  $504,000 at March 31, 1997
    and $574,910 at December 31, 1996.) ............          731,176           685,709           676,797
  Inventories ......................................          186,338           256,698           187,953
  Loan Receivable ..................................          114,560           114,560           114,560
  Marketing Service Contract .......................          850,685         1,027,911         1,205,137
  Prepaid Expenses .................................            6,158             6,158            12,162
                                                         ------------      ------------      ------------

                        TOTAL CURRENT ASSETS .......        1,912,364         2,139,656         2,375,797
                                                         ------------      ------------      ------------


PROPERTY AND EQUIPMENT
  Property and Equipment ...........................        2,800,394         2,794,870         2,754,910
  Accumulated Depreciation .........................         (924,017)         (778,502)         (634,314)
                                                         ------------      ------------      ------------

                  NET PROPERTY AND EQUIPMENT .......        1,876,377         2,016,368         2,120,596
                                                         ------------      ------------      ------------

OTHER ASSETS
   PCS Licenses ....................................       26,452,200        26,452,200        26,452,200
   Deferred PCS Interest ...........................        1,334,275           910,023           479,401
   Loan Origination Fees ...........................          123,750           287,876           808,287
   Paging Carrier Agreement ........................          945,649           962,835           980,022
  Deferred Private Placements Costs ................             --             347,971           237,243
   Deferred Debenture Costs ........................          137,969              --                --
  Deferred PCS License Costs .......................          391,191           366,650           335,932
  Security Deposits and Other Assets ...............          141,287           126,945           160,795
   Goodwill ........................................           62,346            63,459            66,202
   Deferred Registration Costs .....................           76,546            84,176            84,176
                                                         ------------      ------------      ------------

                          TOTAL OTHER ASSETS .......       29,665,213        29,602,135        29,604,258
                                                         ------------      ------------      ------------

                                TOTAL ASSETS .......     $ 33,453,954      $ 33,758,159      $ 34,100,651
                                                         ============      ============      ============

                             See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                              ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                                         CONSOLIDATED BALANCE SHEETS
                                                 (continued)


                                    LIABILITIES AND STOCKHOLDERS' EQUITY


                                                               JUNE 30,         MARCH 31,      DECEMBER 31,
                                                            -----------      ------------      ------------
                                                                1997              1997              1996
                                                             (UNAUDITED)       (UNAUDITED)
<S>                                                         <C>              <C>               <C>
CURRENT LIABILITIES
  Accounts Payable ...................................        2,576,224      $  1,971,849      $  1,956,329
  Notes Payable - Other ..............................          205,788           941,949         1,081,538
  Notes Payable - Bank ...............................           95,000            95,000            95,000
  Notes Payable - Stockholders .......................          112,604            92,215           181,677
  Current Portion of Obligations Under Capital Leases           234,885           234,885           234,885
  Current Portion of Long Term Debt ..................            8,793             8,793             8,793
  Private Placement Advance ..........................             --           1,628,254           500,000
  Accrued Expenses ...................................          353,025         1,002,617           552,005
  Accrued Interest ...................................        1,024,051           607,429           493,401
  Customer Deposits ..................................           22,854            23,929            24,009
                                                            -----------      ------------      ------------

                   TOTAL CURRENT LIABILITIES .........        4,633,224         6,606,920         5,127,637
                                                           ------------      ------------      ------------

LONG TERM LIABILITIES
  Notes Payable ......................................       23,806,980        23,806,980        23,806,980
  Long Term Debt .....................................           38,981            41,879            43,971
  Obligations under Capital Leases ...................          625,085           682,377           745,639
  Debentures Payable Advance .........................        1,061,302              --                --
                                                           ------------      ------------      ------------

TOTAL LONG TERM LIABILITIES ..........................       25,532,348        24,531,236        24,596,590
                                                           ------------      ------------      ------------

Minority Interest ....................................          428,344           424,542           415,474

                              See Notes to Consolidated Financial Statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                              ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                                         CONSOLIDATED BALANCE SHEETS
                                                 (continued)


                                     


                                                               JUNE 30,         MARCH 31,      DECEMBER 31,
                                                            -----------      ------------      ------------
                                                                1997              1997              1996
                                                             (UNAUDITED)       (UNAUDITED)
<S>                                                         <C>              <C>               <C>
STOCKHOLDERS' EQUITY
  Preferred Stock,  par value $.01 per share,
     8,000,000 authorized, 4,000,000
    Series B Non-Voting Convertible Shares issued
     outstanding at June 30, 1997, March 31, 1997
     and December 31 1996, respectively ..............           40,000            40,000            40,000
  Common Stock, par value $.60 per share, 40,000,000
     authorized, issued and outstanding , 1,221,626 at
     June 30, 1997 and  1,015,765 at March 31, 1997                                
     and December 31, 1996  ..........................          732,976           609,460           609,460
  Additional Paid-In Capital .........................       20,185,397        18,295,820        18,295,820
  Retained (Deficit) .................................      (12,092,634)      (10,723,068)       (8,978,629)
  Subscription Receivable ............................       (6,000,000)       (6,000,000)       (6,000,000)
  Notes Receivable arising from Common Stock Purchase
  Warrants Sold ......................................           (5,701)           (5,701)           (5,701)
                                                           ------------      ------------      ------------

                  TOTAL STOCKHOLDERS' EQUITY .........        2,860,038         2,216,511         3,960,950
                                                           ------------      ------------      ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ...........     $ 33,453,954      $ 33,779,209      $ 34,100,651
                                                           ============      ============      ============

                             See Notes to Consolidated Financial Statements.

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                    ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS AND RETAINED (DEFICIT)
                                       (UNAUDITED)

                                                                  THREE MONTHS ENDED
                                                                      JUNE 30,
                                                            ---------------------------- 
                                                                1997             1996
                                                            -----------      -----------
<S>                                                         <C>              <C>
REVENUES
  Paging & Two Way Radio ..............................     $   545,532             --
  Commissions .........................................          95,573        1,036,169
  Electronics .........................................           9,614        1,230,268
  Interest Income .....................................             430             --
                                                            -----------      -----------

                                 TOTAL SALES ..........         651,149        2,266,437
                                                            -----------      -----------
COST OF SALES
  Paging & Two Way Radio ..............................         347,167             --
  Commissions .........................................          85,663          808,962
  Electronics .........................................           9,421          971,918

                         TOTAL COST OF SALES ..........         442,251        1,780,880
                                                            -----------      -----------

                                GROSS PROFIT ..........         208,898          485,557
                                                            -----------      -----------
EXPENSES
  Selling .............................................         542,204          380,566
  General and Administrative ..........................         938,195          685,111
  Interest Expense ....................................          94,263           43,327
                                                            -----------      -----------

                              TOTAL EXPENSES ..........       1,574,662        1,109,004
                                                            -----------      -----------

INCOME BEFORE MINORITY INTEREST,
AND INCOME TAXES ......................................      (1,365,764)        (623,447)
                                                            -----------      -----------

 Minority Interest in Loss of Consolidated Subsidiaries          (3,802)            --
                                                            -----------      -----------

LOSS BEFORE INCOME TAXES ..............................      (1,369,566)        (623,447)
  Income Taxes ........................................            --               --
                                                            -----------      -----------

NET LOSS ..............................................     ($1,369,566)     ($  623,447)

LOSS PER COMMON SHARE .................................     ($     1.30)     ($     2.27)
                                                            ===========      ===========

AVERAGE COMMON SHARES OUTSTANDING (NOTE 11) ...........       1,052,820          274,983
                                                            ===========      ===========

                             See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                     ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (UNAUDITED)

                                                                  THREE MONTHS ENDED
                                                                        JUNE 30,
                                                             -----------      -----------
                                                                  1997            1996
                                                             -----------      -----------
<S>                                                          <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net Loss .............................................     ($1,369,566)     ($  623,447)
  Adjustments to Reconcile Net Loss
  Net Cash Used By Operations:
  Issue of Common Stock for Marketing Agreement ........            --        $   187,500
  Issue of Common Stock for interest expense ...........          33,334
  Depreciation and Amortization ........................         355,481           10,942
  Amortization of Service Contract .....................         177,226             --
  Provision for Doubtful Accounts ......................           4,404             --
  Non Cash Other Expense ...............................            --                 (7)
  Minority Interest in Loss ............................          (3,802)            --
  Changes in:
  Accounts Receivable ..................................         (49,871)        (909,659)
  Inventories ..........................................          70,360            6,281
  Prepayments ..........................................            --              9,141
  Accounts Payable .....................................         604,375         (321,732)
  Accrued Expenses and Taxes Payable ...................        (649,592)          84,714
  Accrued Interest .....................................         416,622             --
  Customer Deposits ....................................          (1,075)          38,742
    TOTAL ADJUSTMENTS ..................................         957,462         (894,078)
                                                             -----------      -----------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES ...................................        (412,104)      (1,517,525)
                                                             -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES
  Loan Receivable ......................................            --            482,966
  Purchase Warrants ....................................            --             33,300
  Other Assets .........................................          (5,599)         (21,267)
  Deferred PCS Interest Costs ..........................        (424,252)         (17,500)
  Deferred PCS License and Buildout Costs ..............         (24,541)            --
  Deferred Private Placement Costs .....................         347,971         (143,037)
  Deferred Debenture Costs .............................        (137,969)            --
  Bid Deposit ..........................................            --           (322,610)
  Additions to Property and Equipment ..................          (5,524)        (134,906)
  Payment for purchase of Threshold Communications, Inc. 
    net of cash acquired ...............................            --           (180,556)
                                                             -----------      -----------
NET CASH BY
INVESTING ACTIVITIES ...................................        (249,914)        (303,610)
                                                             -----------      -----------

                             See Notes to Consolidated Financial Statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                     ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                           CONSOLIDATED STATEMENTS OF CASH FLOWS
                                        (UNAUDITED)
                                        (continued)

                                                                  THREE MONTHS ENDED
                                                                        JUNE 30,
                                                             -----------      -----------
                                                                  1997            1996
                                                             -----------      -----------
<S>                                                          <C>              <C>
CASH FLOWS FROM FINANCING
ACTIVITIES
  Net Proceeds (Payments) of Shareholder Loans .........          20,389         (218,312)
  Private Placement Advance ............................      (1,628,254)            --
  Payments of Bank Loans ...............................            --            (15,000)
  Proceeds from Debentures Advance .....................       1,061,302        2,808,406
  Payments of Other Loans ..............................        (364,059)            --
  Principal Payments of Capital Lease Obligations ......         (57,292)         (24,665)
  Sale of Common Stock .................................       1,604,759          142,250
                                                             -----------      -----------
NET CASH BY
FINANCING ACTIVITIES ...................................         636,845        2,692,679
                                                             -----------      -----------

NET INCREASE (DECREASE) IN CASH ........................         (25,173)         871,544
CASH, BEGINNING OF PERIODS .............................          48,620           54,329
                                                             -----------      -----------

CASH, END OF PERIODS ...................................     $    23,447      $   925,873
                                                             ===========      ===========

SUPPLEMENTAL DISCLOSURE FOR CASH FLOWS
 CASH PAID DURING THE PERIOD FOR :
  Interest ..........................................     $ 94,263     $ 43,327
  Taxes .............................................         --           --
SUPPLEMENTAL SCHEDULE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES
  Property Acquired Under Capital Lease .............         --       ($32,258)
  Common Stock Issued for Payment of Loan Payable ...     $375,000         --

                 See Notes to Consolidated Financial Statements. 

</TABLE>
<PAGE>
<TABLE>
<CAPTION>
                                          ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                                     CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


                                                                                                                    
                                                                                                       Additional        Retained   
                                              Preferred Stock                  Common Stock            Paid-In           Earnings 
                                           Shares        Amount            Shares         Amount        Capital          (Deficit) 
                                      ------------    ------------    ------------    ------------    ------------     ------------
<S>                                   <C>             <C>             <C>             <C>             <C>              <C>   

Balance as of December 31, 1996 ..       4,000,000    $     40,000       1,015,765    $    609,460    $ 18,295,820     ($ 8,978,629)
Net loss .........................            --              --              --              --      ($ 1,744,439)            --   
                                      ------------    ------------    ------------    ------------    ------------     ------------

Balance as of March 31, 1997 .....       4,000,000    $     40,000       1,015,765    $    609,460    $ 18,295,820     ($10,723,068)
Sale of Common Stock in connection
  with Private Placement net of
  $457,239 of expenses ...........            --              --           205,861    $    123,516    $  1,889,577             --   
Net loss .........................            --              --              --              --              --       ($ 1,369,566)
                                      ------------    ------------    ------------    ------------    ------------     ------------

Balance as of June 30, 1997 ......       4,000,000    $     40,000       1,221,626    $    732,976    $ 20,185,397     ($12,092,634)
                                      ============    ============    ============    ============    ============     ============

<CAPTION>
                    ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY


                                      Notes Receivable                             
                                        Arising From                                
                                        Common Stock      Subscription            
                                      Purchase Warrant     Receivable          Total 
                                        -----------       -----------       -----------
<S>                                     <C>               <C>               <C>
Balance as of December 31, 1996 ..      ($    5,701)      ($6,000,000)      $ 3,960,950
Net loss .........................             --                --         ($1,744,439)
                                        -----------       -----------       -----------

Balance as of March 31, 1997 .....      ($    5,701)      ($6,000,000)      $ 2,216,511
Sale of Common Stock in connection
  with Private Placement net of
  $457,239 of expenses ...........             --                --         $ 2,013,093
Net loss .........................             --                --         ($1,369,566)
                                        -----------       -----------       -----------

Balance as of June 30, 1997 ......      ($    5,701)      ($6,000,000)      $ 2,860,038
                                        ===========       ===========       ===========

</TABLE>
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

         (A) Business Activity and Basis of Presentation

         During 1994,  Electronics  Communications Corp. (the "Company") changed
         its name from Genetic Breeding,  Inc. to Internow Affiliates,  Inc. and
         then to Electronics  Communications Corp. Effective on January 1, 1994,
         the Company  acquired Free Trade  Distributors,  Inc. (which engages in
         the  wholesale   distribution   of  cellular   telephones  and  related
         accessories and electronic products) and Trade Zone Distributors,  Inc.
         (which  engages in the  activation of cellular  radio  subscribers  for
         commissions, both serving the New York Metropolitan Area).

         In 1995,  the Company  formed  Electrocomm  Wireless,  Inc., a Delaware
         corporation as a subsidiary, to become a radio paging and two-way radio
         carrier in the New York Metropolitan Area and the State of New Jersey.

         In July 1995,  the  Company  formed  Personal  Communications  Network,
         Inc.("PCN"),  a Delaware  corporation,  to  participate  in the Federal
         Communications  Commission  auction for  licenses to engage in personal
         communications  services  ("PCS").  On May 8, 1996 the Company obtained
         six PCS licenses for $26,452,200  entitling it to operate  wireless PCS
         telephone  systems  covering nearly 1.5 million people in three states.
         In  February,  1997 four (4)  officers  and  directors  of the  Company
         acquired a 24% interest in "PCN".

         On March 22, 1996,  Threshold  Communications,  Inc.  ("TCI")  acquired
         substantially  all of the assets and  assumed  certain  liabilities  of
         General Communications and Electronics, Inc. ("GCE"). TCI also acquired
         as part of this transaction 56 2/3% of the outstanding stock of General
         Towers of America, Inc. (which engages in the business of providing two
         way radio  services  in the New York  Metropolitan  Area).  TCI and its
         subsidiary  General  Towers of  America,  Inc.  ("GTA")  are treated as
         subsidiaries of the Company. 

         On June 28, 1996, the Company acquired 51% of Threshold Communications,
         Inc.  (which engages in the business of providing radio paging services
         in the New York Metropolitan Area.)

         On July 31, 1997 the Company  authorized a 12 to 1 reverse  stock split
         of its $.05 par value  common  stock.  The new common stock will have a
         $.60 per share par value. All references to number of common shares for
         all periods presented have been retroactively  restated for the reverse
         stock split.

         On August 11, 1997 the Company changed its year end from December 31 to
         March 31.

         The accompanying  unaudited 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  and  Article 10 of  Regulation  S-X.  Accordingly,  they do not
         necessarily  include all of the information  and footnotes  required by
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued)

         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 three months ended June
         30, 1997 are not  necessarily  indicative  of the  results  that may be
         expected for the year ended March 31, 1998. The unaudited  consolidated
         financial   statements   should  be  read  in   conjunction   with  the
         consolidated financial statements and footnotes thereto included in the
         Company's  annual report on form 10K-SB for the year ended December 31,
         1996.

         (B) Principles of Consolidation

         The  consolidated   financial   statements   include  the  accounts  of
         Electronics  Communications Corp.,  subsequent to the Acquisition,  and
         its wholly-owned  subsidiaries,  Free Trade  Distributors,  Inc., Trade
         Zone  Distributors,  Inc. (Trade Zone  Distributors , Inc. has a wholly
         owned  subsidiary,  Trade  Zone  Distributors,  II,  Inc.  which  is an
         inactive,   non-operating  entity),  Electrocomm  Wireless,  Inc.,  and
         majority owned subsidiaries,  Personal  Communications  Network,  Inc.,
         Threshold Communications,  Inc. and General Towers of America, Inc. All
         significant intercompany accounts and transactions have been eliminated
         in consolidation.

         (C) Property and Equipment

         Property and equipment are recorded at cost.  Depreciation  is provided
         using  accelerated  methods  over  the  estimated  useful  lives of the
         respective  assets  (5 to 7 years).  Depreciation  expense  charged  to
         operations  for the quarter  ended June 30, 1997 and 1996 was  $145,515
         and $21,881, respectively.

         (D) Inventories

         Inventories  are  valued  at the  lower  of  cost  or  market,  cost is
         determined using the first in, first out method.

         (E) Revenue Recognition

         It is the Company's policy to categorize revenue into either sales from
         electronic  goods,  commissions  for fees  earned on sales of  cellular
         radio  service  contracts  or sales  from its radio  paging and two way
         radio  services.  Sales  from  electronic  goods  includes,  but is not
         limited to cellular phones and related accessories and other electronic
         automobile  and  office  products.  Revenue  from the  above  mentioned
         products are recognized  when they are shipped.  Revenues from sales of
         electronic goods  represented 1% and 54% of the Company's total revenue
         for the quarter ended June 30, 1997 and 1996 respectively.  Commissions
         are  inclusive  of fees earned for the sale of cellular  radio  service
         contracts  and  residuals  received on those  contracts.  Revenues  and
         related  commissions  from  the  sale  of  the  service  contracts  are
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         (E) Revenue Recognition (continued)

         recognized  at the point of  activation.  Revenues  from  residuals are
         realized when approved by the cellular  radio service  supplier and are
         paid on customer usage for a maximum of three years. Commission revenue
         represented  15% and 40% of the Company's total revenue for the quarter
         ended June 30, 1997 and 1996 respectively.
 
         The Company establishes a reserve of 3.5% for charge-backs on customers
         that  prematurely  terminate  cellular  service.  In  addition  to  the
         commissions  paid by the cellular radio supplier,  the Company receives
         co-op fees.  Co-op fees are  reimbursements  of  expenditures  that are
         approved by the cellular radio supplier for  advertising  and promotion
         in connection with the sale of cellular radio contracts.  Revenues from
         radio paging and two way radio services are recognized in the beginning
         of the  month  for  which  they are  invoiced  and  amounted  to 84% of
         revenues in the quarter ended, June 30, 1997.

         (F) Concentration of Credit Risk

         The Company  maintains its major cash accounts in banks in the New York
         and New Jersey Area. The total cash deposits are insured by the Federal
         Deposit Insurance Corporation up to $100,000 per account.

         The Company currently  receives all of its commission  revenue from two
         major  cellular  radio and PCS carriers.  Although  there are a limited
         number of sources for this type of revenue,  management  believes  that
         other sources could provide similar  commissions on comparable terms. A
         change in  carriers  could cause a delay in  activations  and a loss of
         sales which would affect operating results adversely.

         (G) Use of Estimates

         The  preparation of financial  statements in conformity  with generally
         accepted  accounting  principles  requires management to make estimates
         and  assumptions  that  affect  the  reported  amounts  of  assets  and
         liabilities and disclosure of contingent  assets and liabilities at the
         date of the financial  statements and the reported  amounts of revenues
         and expenses during the period.  Actual results could differ from those
         estimates.

         (H)  Fair Value of Financial Instruments

         At June 30, 1997, March 31, 1997 and December 31, 1996, the fair values
         of cash, cash equivalents,  non-convertible short term debt and current
         portion of long-term debt, accounts payable, accrued interest,  accrued
         salaries and other  accrued  liabilities  approximated  their  carrying
         values because of the short-term nature of these instruments.  The fair
         value and carrying  amount of the Company's long term notes payable are
         deemed to be approximately equivalent as the note was issued based upon
         current interest rates.
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - PRIVATE PLACEMENT OF SECURITIES AND 8% CUMULATIVE CONVERTIBLE
         DEBENTURES

         Prior  to June  30,  1997  the  Company  received  a  $923,333  advance
         representing   future   payments  for   $1,061,302   of  8%  cumulative
         convertible  debentures due June 30, 2000.  Subsequent to June 30, 1997
         the Company received $1,251,667 for $1,438,698 of these debentures.

         205,861  units  consisting  of one  share  of  common  stock  and 1 1/2
         warrants  to  purchase  .75  shares of common  stock  sold in a Private
         Placement  of  securities  on May 29, 1997 are expected to be converted
         into  $2,470,334  of  the 8%  cumulative  convertible  debentures.  The
         closing is expected to be completed in the  September 30, 1997 quarter.
         For the  issuance of the  205,861  units on May 29,  1997,  the Company
         received  $1,604,760,  exchanged  $408,334 of notes payable and accrued
         interest and paid $457,239 of expenses related to the Private Placement
         of securities.

NOTE 3 - ACCOUNTS RECEIVABLE

         Accounts  Receivable  consist  of amounts  due for sales of  electronic
         goods,  commissions due from major cellular radio and PCS suppliers and
         from sales of radio  paging and two way radio  service.  Components  of
         Accounts  Receivable  are  $154,399 for the sale of  electronic  goods,
         $197,552 for commissions, and $379,225 for the sale of radio paging and
         two way radio service at June 30, 1997, $131,435, $194,129 and $360,145
         at March 31, 1997 and  $183,178,  $240,908 and $252,711 at December 31,
         1996.

NOTE 4 - OTHER ASSETS

         (A)  The  PCS  licenses  were  awarded  in  a  Federal   Communications
         Commissions "C" Block Auction.  The markets awarded the Company include
         Elmire-Corning,  New  York;  Bangor/Lewiston-Auburn/Waterville-Augusta,
         Maine; and Burlington/Rutland-Bennington,  Vermont. The Vermont markets
         encompass virtually the whole state. The Maine markets cover a majority
         of the  population and most of the state  geographically.  The licenses
         expire and are subject to renewal after ten (10) years.

         The Company's total winning bids amounted to $26,452,200, after the 25%
         discount provided to small businesses, which the Company qualifies for,
         under  the  terms  of  the  auction.  The  Company  deposited  cash  of
         $2,645,220.  The  remaining  balance  will be paid out over the next 10
         years with 7% interest only during the first six years. Included on the
         license costs are certain legal fees incurred in obtaining the license.
         Capitalized  PCS  interest  in  the  amount  of  $1,334,275  represents
         interest  capitalized  in  conjunction  with these  licenses.  Interest
         capitalized  was  $424,252,  $430,622 and $479,401 for the three months
         ended June 30,  1997,  March 31, 1997 and the year ended  December  31,
         1996  respectively.  The  company  has  not  begun  PCS  service.  Upon
         inception of such services,  the Company will amortize the licenses and
         related costs over a 40 year period.
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         (B) Deferred  License Costs consists of various  legal,  consulting and
         registration fees in connection with obtaining paging licenses, two-way
         radio licenses and personal  communication service licensing.  Interest
         cost associated with obtaining these licenses is being capitalized. The
         licenses  when put into  service  will be  amortized  over a forty year
         period.

         (C) The Paging Carrier  Agreement  consists of six paging licenses with
         various  paging  carriers.  The  cost  of  such  agreements  are  being
         amortized over a fifteen year period.
 
NOTE 5 - LOAN RECEIVABLE

         On June 30, 1997 the loan  receivable-other  consists  solely of a note
         due from one of the  Company's  consultants.  This note is due December
         31, 1997 and bears an interest rate of 8%.

NOTE 6 - MARKETING SERVICE CONTRACT

         On  September  4,  1996,  the  Company  entered  into a Client  Service
         Agreement with a public  relations  firm.  Pursuant to the terms of the
         agreement,   the  firm  was  hired  as  a  financial  public  relations
         consultant  to  promote  the   Company's   business  to  the  financial
         community. The term of the agreement is for two years. In consideration
         of the services to be performed by the firm, the Company issued 191,667
         registered  shares of the Company's  common stock.  As of June 30, 1997
         the Company had $850,685 prepaid with respect to this contract.

NOTE 7 - NOTES PAYABLE

         (A ) On April 18, 1995, the Company entered into a financing  agreement
         with  a bank  in the  amount  of  $100,000.  This  loan  is  personally
         guaranteed by the Company's  President,  cross corporate  guaranteed by
         Free Trade Distributors,  Inc. and secured by the Company's  inventory.
         Interest is payable  monthly at the rate of 1.5% per annum in excess of
         the bank's  fluctuating prime lending rate. At June 30, 1997, March 31,
         1977 and December 31, 1996, the balance on this loan was $95,000.  This
         note was  extended  by the bank until  August 7, 1997.  The  Company is
         negotiating to convert this financing arrangement into a long term note
         or similar debt instrument which should be completed prior to September
         30, 1997.

         (B) On  February  29,  1996,  the  Company  entered  into  a  financing
         arrangement  with a corporation in the amount of $134,000.  Interest is
         payable at a rate of 10% in monthly  installments  of $1,117 per month.
         As additional consideration,  the Company issued the corporation 66,667
         "A"  Warrants  with  90  day  registration   rights  and  "Piggy  Back"
         registration rights with any other offering of the Company. The balance
         of this loan was $109,711 at December  31,  1996.  The note was paid in
         1997.  As a result of this  transaction,  $500,000 in loan  origination
         fees were  recognized,  which were being amortized over the life of the
         loan.
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         (C) In connection with TCI's  acquisition of GCE, the Company assumed a
         $350,000  non-interest bearing note payable to a corporation owned by a
         shareholder of the Company.  The Principal  amount of this non interest
         bearing  note was  $251,777,  $281,944  and  $311,111 at June 30, 1997,
         March 31, 1997 and December 31, 1996,  respectively,  less  unamortized
         discount  (discount  is based on  interest of 12%) for a net balance of
         $205,788, $235,955 and $265,121 respectively.

         (D) The Notes Payable - FCC consist of six 7% 10 year notes aggregating
         $23,806,980.  The  notes  are  payable  in  quarterly  installments  of
         interest  only for the  first six years  and  principal  plus  interest
         thereafter.  The notes are secured by the PCS  licenses.  The  interest
         payment due December 31, 1996 was partially paid on March 31, 1997. The
         Company has not made a quarterly interest payment since March 31, 1997.
         This  non-payment  is due to an FCC  moratorium  on quarterly  interest
         payments  while it awaits a decision on the FCC changing the  quarterly
         installment due. This  anticipated  change is being considered to allow
         PCS license  holders to better  utilize short term cash to more quickly
         build out their systems in an effort to generate revenues.  The Company
         has accrued  interest  expense of $1,334,275  through the June 30, 1997
         quarter.

         (E) On September 20, 1996,  the Company  entered into a loan  agreement
         with a private lender, pursuant to which the Company borrowed $500,000.
         The loan bore  interest  at the rate of 10% per annum.  The loan became
         due and  payable  on or  before  June 20,  1997,  however  the  Company
         requested an automatic  three (3) month  extension on the due date. The
         Company used the proceeds of this loan for general corporate  purposes.
         The balance owed at March 31, 1997 and December 31, 1996 was  $500,000.
         In the three months ended June 30, 1997,  the Company paid  $125,000 of
         this note and  exchanged  $375,000  for  shares of common  stock of the
         Company.

         (F)  Purchase  Money Notes  Payable in monthly  installments  of $1,262
         including  interest at 13%.  The last payment is due on August 1, 2001.
         This loan is  collateralized by equipment with a book value of $44,842.
         The balance of this loan was  $47,774,  $50,852 and $52,764 at June 30,
         1997, March 31, 1997 and December 31, 1996 respectively.

         (G) On October 21, 1996 the Company  entered into a loan agreement with
         a private lender in the amount of $200,000. The loan is due in November
         1997 with interest at 10% per annum. The loan was secured by all of the
         Company's  current  accounts  receivable  as well as all  equipment and
         fixtures  owned by the Company.  See Notes 2J and 13. The note was paid
         in full during the quarter ended June 30, 1997

NOTE 8 - CAPITAL LEASE

         The interest rates on the  capitalized  leases range from 10% to 29.17%
         and  are  imputed  based  on the  lower  of the  Company's  incremental
         borrowing  rate at the inception of each lease or the lessors  implicit
         rate of return.
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - NOTES PAYABLE - STOCKHOLDERS

         Notes Payable -  Stockholders  are unsecured and payable on demand with
         interest at rates from 7.5% to 10.65% per annum.

NOTE 10 - OTHER ADVERTISING, PROMOTIONAL AND MARKETING SERVICES

         On October 7, 1996 the Company  entered  into a  consulting  agreement.
         Pursuant to the agreement the consulting  firm is to provide  financial
         consulting and advisory services to the Company and its subsidiary PCN,
         including,   without   limitation,   general  advice  with  respect  to
         financing,  acquisition, joint venture or other corporate transactions.
         In  consideration  of the services to be rendered PCN is issuing to the
         consulting  firm  or its  designees  ten  shares  of its  common  stock
         representing an aggregate of 10% of the issued and  outstanding  shares
         of PCN.
 
NOTE 11 - LOSS PER COMMON SHARE

         The Company  computes loss per common share by dividing the net loss by
         the weighted  average  number of common  stock and dilutive  equivalent
         shares outstanding. The computation of fully diluted net loss per share
         was  antidilutive  in each of the  periods  presented;  therefore,  the
         amounts reported for primary and fully diluted loss are the same.

NOTE 12 - CONVERTIBLE PREFERRED STOCK

         On July 23, 1996, the Board of Directors of the Company  authorized the
         issuance  of an  aggregate  of  4,000,000  shares of Series B Preferred
         Stock ("Preferred  Stock").  Each share of Preferred Stock is valued at
         $1.50 per share and convertible into .13 shares of the Company's common
         stock.  These  shares were  purchased  by three year  Promissory  Notes
         ("Notes")  bearing  interest at the rate of 7% per annum.  The interest
         shall  accrue and not be payable  until the  securities  are sold.  The
         Notes shall be  immediately  extendible  for additional one year terms.
         The Notes are  non-recourse,  but  collateralized  by the Pledge of the
         Preferred  Stock.  Each share of Preferred  Stock is subject to a three
         year  vesting  period,  whereby  1/3 was  immediately  vested,  and the
         balance  to be  vested  during  the  next  two  years  as  long  as the
         aforementioned  individuals  remain as either an officer or director of
         the Company.

NOTE 13 - WARRANTS TO PURCHASE COMMON STOCK

         During 1996,  the Company  issued  46,667 shares of Class A warrants in
         connection with obtaining  financing from certain private lenders.  The
         warrants  entitle the holder to purchase one share of common stock at a
         price of $30.00 and are exercisable through May 12, 1999.

NOTE 14 - INCOME TAXES

         The  Company  adopted the  liability  method of  accounting  for income
         taxes, as set forth in Statement of Financial  Accounting Standards No.
         109,  "Accounting  for  Income  Taxes."  Under  the  liability  method,
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

         deferred  taxes are  determined  based on the  differences  between the
         financial  statement and tax basis of assets and liabilities at enacted
         tax rates in effect in the years in which the  differences are expected
         to reverse.  The Company has net operating  loss carry forwards that it
         does not expect to utilize pursuant to Internal Revenue Regulations.

NOTE 15- PENDING LITIGATION

         On March 4, 1996 the Company  commenced an action entitled  Electronics
         Communications  Corp. against Toshiba America Consumer  Products,  Inc.
         ("Toshiba") and Audiovox Corporation ("Audiovox"),  case number 96 Civ.
         1365, in the United States  District Court of the Southern  District of
         New  York.  The  Complaint  asserts  claims  for  antitrust,  breach of
         contract, tortious interference with contract and tortious interference
         with  prospective  economic  advantage  and  business  relations.   The
         Complaint  seeks  damages  in excess of  $3,000,000.  This  action  was
         commenced because the Company expended significant monies and resources
         including the issuance of 16,667  shares of the Company's  common stock
         to a consultant in anticipation of a South American cellular  telephone
         program  which the Company was to  undertake  exclusively  on behalf of
         Toshiba,  based on certain  reliance on Toshiba,  and the withdrawal of
         Toshiba's  commitment based on what the Company believes is an unlawful
         conspiracy with Audiovox.  Immediately prior to the commencement of the
         program,  Toshiba  discontinued  manufacturing  the  line  of  cellular
         telephones that the program was designed to offer. This decision, which
         the Company  believes was coerced by Audiovox,  has caused  significant
         damages to the Company.

         The  defendants  Toshiba and Audiovox moved to dismiss a portion of the
         case,  claiming  that the Company had not pled a  cognizable  antitrust
         cause of action,  and that the remaining claims should be dismissed for
         the lack of supplemental  jurisdiction,  which could then be prosecuted
         in state  courts.  On August 12,  1996 the Court  ruled in favor of the
         motion of defendants,  Toshiba and Audiovox, and the case was dismissed
         on such date. The Company appealed the Court's ruling, filing its Brief
         on Appeal on February 21, 1997. On March 12, 1997, Toshiba and Audiovox
         served their  responsive  briefs,  and oral argument  before the United
         States  Court of  Appeals  for the Second  Circuit  was held on May 22,
         1997, and the parties are awaiting the Court's decision.

         On or about March 11,  1997,  the Company was served with a Summons and
         Complaint in an action entitled:  "Daily News, L.P. v. Free Trade a/k/a
         Free Trade Distributors,  Inc. and Electronics  Communications  Corp.,"
         pending in the United States  District Court for the Southern  District
         of New York. The Plaintiff,  The Daily News, claims breach of a certain
         Advertising  Contract,  in that the Company's  subsidiary failed to pay
         for  certain  advertising  and failed to meet the  minimum  advertising
         expenditures set forth therein, resulting in the Imposition of a "short
         rate" with higher payment requirements.  As a result,  Plaintiff claims
         damages  aggregating  $156,284.87.  The  Company  believes  it  has  an
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 15- PENDING LITIGATION (continued)

         excellent working  relationship with The Daily News, and that this suit
         resulted from a misunderstanding  between the respective  principals of
         the parties,  and which  concerned  the  dependency of the level of the
         Company's  advertising  on the  continuation  of the  Company's  agency
         relationship  with  BANMC.  Counsel  for the Company and The Daily News
         stipulated to extend the Company's  time to answer or move with respect
         to the Complaint, so that the principals might confer.
 
         As a result of those discussions,  an Agreement in Principle  regarding
         settlement  was reached.  Counsel for the parties have prepared and the
         parties have executed appropriate  settlement documents which have been
         submitted to the Court to be "So Ordered." In substance,  the agreement
         provides  for the  payment  of $75,000  by the  Company  in  sequential
         payments  through  in or  about  March,  1998,  with  a  resumption  of
         advertising  in The Daily News at such times and in such amounts as the
         Company may determine. If The Daily News is satisfied that the business
         relationship  has been restored to its  satisfaction as at December 31,
         1997,  it shall waive all  additional  payments and the matter shall be
         settled  for  $75,000.  If for any  reason  The  Daily  News  elects to
         proceed, the Company retains all defenses to the payment of any amounts
         in excess of $75,000.

         On or about July 11,  1997 the  Company  was served  with a Summons and
         Complaint  in an action  entitled:  Brightpoint,  Inc.  v.  Free  Trade
         Distributors, Inc. and Electronics Communications Corp., pending in the
         United  States  District  Court for the  southern  District of Indiana,
         Indianapolis Division. Brightpoint is a former supplier of the Company,
         and  claims  that  the  Company  owes it  approximately  $400,000  plus
         interest for merchandise delivered,  consisting principally of cellular
         telephones.  Prior to this suit,  counsel for the  Company  advised the
         potential   claimant  that  the  Company  believes  it  has  valid  and
         compelling counterclaims which equal or exceed Brightpoint's claims for
         payment. The Company has not answered yet, based upon an agreement with
         counsel for  Brightpoint  to extend such  obligation to answer  without
         date,  pending an exchange of  documents,  information  and views,  and
         possible  settlement  discussions.  However,  if settlement  can not be
         achieved  on a basis  deemed to be  reasonable  by  Management  for the
         Company,  the  Company  intends  to  direct  its  counsel  to deny  the
         essential allegations of the Complaint,  and to assert counterclaims in
         excess  of  Brightpoint's  claims.  Since  this  litigation  is at  its
         incipient stage, it is too early to fully assess the likely outcome, or
         any ability to achieve alternative resolution.

NOTE 16- BUSINESS PLAN AND LIQUIDITY

         The Company's financial  statements for the three months ended June 30,
         1997 have been prepared on a going concern  basis,  which  contemplates
         the realization of assets and settlement of liabilities and commitments
         in the normal  course of business.  The Company has incurred net losses
         of $1,369,566  for the quarter ended June 30, 1997,  $1,048,802 for the
         quarter ended March 31, 1997 and $5,604,054 for the year ended December
         31, 1996. The Company has a working capital deficiency of $2,720,860 at
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16- BUSINESS PLAN AND LIQUIDITY (continued)

         June 30,  1997.  In  addition,  the Company has an interest  payment in
         excess of $2,000,000 due to the FCC (see Note "7D") upon lifting of the
         moratorium.  Management  recognizes  that  the  Company  must  generate
         additional  resources or consider modifying  operations to enable it to
         continue  operations  with  available  resources.   Management's  plans
         include consideration of the sale of additional equity securities under
         appropriate  market conditions,  alliances with entities  interested in
         and  resources to support the  Company's  operation  or other  business
         transactions  which  would  generate  sufficient  resources  to  assume
         continuation of the Company's operations.

         The Company has retained investment banking counsel to advise it on the
         possible  sale of equity  securities as well as to introduce and assist
         in the evaluation of potential merger and partnering opportunities. The
         Company  also has  retained  independent  consultants  to  assist it to
         identify other entities interested in its business.  Management expects
         that these  efforts will result in the  introduction  of other  parties
         with interests and resources  which may be compatible  with that of the
         Company.  However,  no assurances can be given that the Company will be
         successful  in raising  additional  capital or entering into a business
         alliance.  Further,  there can be no  assurance,  assuming  the Company
         raises  additional funds or enters into a business  alliance,  that the
         Company  will  achieve  profitability  or  positive  cash flow.  If the
         Company is unable to obtain adequate additional financing or enter into
         such business alliance,  management will be required to sharply curtail
         the Company's operations.
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES

ITEM 2:  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

         The  following  discussion  should  be read  in  conjunction  with  the
consolidated financial statements and notes thereto.

RESULTS OF OPERATIONS:

Three  months  ended June 30, 1997  compared to the three  months ended June 30,
1996.

         Revenues for sales of electronic products and commissions  decreased by
$1,220,654 and $940,596.  respectively to $9,614.  And $95,573.  for the quarter
ended June 30,  1997.  The  decrease  was fully  attributable  to the  Company's
redirection  of its  operations  and business away from acting  principally as a
distributor of consumer home and office  electronics  products to operating as a
multi-faceted  wireless  telecommunications  company. In light of this change in
direction,  paging and two-way radio sales was  $542,532.  For the quarter ended
June 30, 1997 cost of paging and two-way  radio sales was  $347,167 or 64.0% for
the quarter.

        Cost of electronics and  commissions  sales as a percentage of sales for
the quarter ended June 30, 1997 was 98.0% and 89.6%,  respectively  versus 79.0%
and 78.1%,  respectively for the quarter ended June 30, 1996. This increase cost
of sales was totally  attributable to the change in business direction addressed
previously.  In addition,  the costs  attributable to commission sales increased
due to the settlement and separation  agreement which is addressed fully in Part
II, Item 5, "Other Information".

         Selling,  general and administrative expenses increased by $414,722, or
38.9% as  compared  to the  quarter  ended  June 30,  1996.  This  increase  was
attributable in part to increased sales and  administrative  personnel and other
expenses required to meet the Company's  expansion and growth as a multi-faceted
wireless communications provider.

        Interest expense increased by $50,936 for the comparable quarters due to
increased borrowing by the Company.

         The Company had an operating  loss before taxes of  $1,369,566  for the
quarter  ended June 30, 1997 as  compared to a loss of $623,447  for the quarter
ended  June  30,  1996.  These  losses  resulted   primarily  from  expenditures
associated  with the  development  and  marketing  of the  Company's  paging and
two-way radio systems and the Company's move to more suitable premises including
offsite antenna and transmitter sites.

LIQUIDITY AND CAPITAL RESOURCES

         The Company has incurred net losses of $1,369,566 for the quarter ended
June 30, 1997.  The Company has a working  capital  deficiency  of $2,720,860 at
June 30, 1997.  Management  recognizes that the Company must generate additional
resources or consider modifying  operations to enable it to continue  operations
with available resources.  Management's plans include  consideration of the sale
of additional equity securities under appropriate market  conditions,  alliances
with entities  interested in and resources to support the Company's operation or
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES

other business  transactions which would generate sufficient resources to resume
continuation of the Company's cash flow operations.  However,  no assurances can
be given that the Company will be  successful in raising  additional  capital or
entering  into a  business  alliance.  Further,  there  can  be no  alternative,
assuming the Company raises additional funds or enters into a business alliance,
that the  Company  will  achieve  profitability  or positive  cash flow.  If the
Company is unable to obtain  adequate  additional  financing  or enter into such
business alliance, management will be required to severely curtail the Company's
operation.
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES



                                     PART II


                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

         On March 4, 1996 the Company  commenced an action entitled  Electronics
         Communications  Corp. against Toshiba America Consumer  Products,  Inc.
         ("Toshiba") and Audiovox Corporation ("Audiovox"),  case number 96 Civ.
         1365, in the United States  District Court of the Southern  District of
         New  York.  The  Complaint  asserts  claims  for  antitrust,  breach of
         contract, tortious interference with contract and tortious interference
         with  prospective  economic  advantage  and  business  relations.   The
         Complaint  seeks  damages  in excess of  $3,000,000.  This  action  was
         commenced because the Company expended significant monies and resources
         including the issuance  of 16,667 shares of the Company's  common stock
         to a consultant in anticipation of a South American cellular  telephone
         program  which the Company was to  undertake  exclusively  on behalf of
         Toshiba,  based on certain  reliance on Toshiba,  and the withdrawal of
         Toshiba's  commitment based on what the Company believes is an unlawful
         conspiracy with Audiovox.  Immediately prior to the commencement of the
         program,  Toshiba  discontinued  manufacturing  the  line  of  cellular
         telephones that the program was designed to offer. This decision, which
         the Company  believes was coerced by Audiovox,  has caused  significant
         damages to the Company.

         The  defendants  Toshiba and Audiovox moved to dismiss a portion of the
         case,  claiming  that the Company had not pled a  cognizable  antitrust
         cause of action,  and that the remaining claims should be dismissed for
         the lack of supplemental  jurisdiction,  which could then be prosecuted
         in state  courts.  On August 12,  1996 the Court  ruled in favor of the
         motion of defendants,  Toshiba and Audiovox, and the case was dismissed
         on such date. The Company appealed the Court's ruling, filing its Brief
         on Appeal on February 21, 1997. On March 12, 1997, Toshiba and Audiovox
         served their  responsive  briefs,  and oral argument  before the United
         States  Court of  Appeals  for the Second  Circuit  was held on May 22,
         1997, and the parties are awaiting the Court's decision.

         On or about March 11,  1997,  the Company was served with a Summons and
         Complaint in an action entitled:  "Daily News, L.P. v. Free Trade a/k/a
         Free Trade Distributors,  Inc. and Electronics  Communications  Corp.,"
         pending in the United States  District Court for the Southern  District
         of New York. The Plaintiff,  The Daily News, claims breach of a certain
         Advertising  Contract,  in that the Company's  subsidiary failed to pay
         for  certain  advertising  and failed to meet the  minimum  advertising
         expenditures set forth therein, resulting in the Imposition of a "short
         rate" with higher payment requirements.  As a result,  Plaintiff claims
         damages  aggregating  $156,284.87.  The  Company  believes  it  has  an
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES

ITEM 1.  LEGAL PROCEEDINGS (continued)

         excellent working  relationship with The Daily News, and that this suit
         resulted from a misunderstanding  between the respective  principals of
         the parties,  and which  concerned  the  dependency of the level of the
         Company's  advertising  on the  continuation  of the  Company's  agency
         relationship  with  BANMC.  Counsel  for the Company and The Daily News
         stipulated to extend the Company's  time to answer or move with respect
         to the Complaint, so that the principals might confer.

         As a result of those discussions,  an Agreement in Principle  regarding
         settlement  was reached.  Counsel for the parties have prepared and the
         parties have executed appropriate  settlement documents which have been
         submitted to the Court to be "So Ordered." In substance,  the agreement
         provides  for the  payment  of $75,000  by the  Company  in  sequential
         payments  through  in or  about  March,  1998,  with  a  resumption  of
         advertising  in The Daily News at such times and in such amounts as the
         Company may determine. If The Daily News is satisfied that the business
         relationship  has been restored to its  satisfaction as at December 31,
         1997,  it shall waive all  additional  payments and the matter shall be
         settled  for  $75,000.  If for any  reason  The  Daily  News  elects to
         proceed, the Company retains all defenses to the payment of any amounts
         in excess of $75,000.

         On or about July 11,  1997 the  Company  was served  with a Summons and
         Complaint  in an action  entitled:  Brightpoint,  Inc.  v.  Free  Trade
         Distributors, Inc. and Electronics Communications Corp., pending in the
         United  States  District  Court for the  southern  District of Indiana,
         Indianapolis Division. Brightpoint is a former supplier of the Company,
         and  claims  that  the  Company  owes it  approximately  $400,000  plus
         interest for merchandise delivered,  consisting principally of cellular
         telephones.  Prior to this suit,  counsel for the  Company  advised the
         potential   claimant  that  the  Company  believes  it  has  valid  and
         compelling counterclaims which equal or exceed Brightpoint's claims for
         payment. The Company has not answered yet, based upon an agreement with
         counsel for  Brightpoint  to extend such  obligation to answer  without
         date,  pending an exchange of  documents,  information  and views,  and
         possible  settlement  discussions.  However,  if settlement  can not be
         achieved  on a basis  deemed to be  reasonable  by  Management  for the
         Company,  the  Company  intends  to  direct  its  counsel  to deny  the
         essential allegations of the Complaint,  and to assert counterclaims in
         excess  of  Brightpoint's  claims.  Since  this  litigation  is at  its
         incipient stage, it is too early to fully assess the likely outcome, or
         any ability to achieve alternative resolution.

ITEM 2.  CHANGES IN SECURITIES

         None

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

         None
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        On July 23,  1996 the Board of  Directors  of the  Company  at a Special
Meeting of the Board of  Directors  authorized  the  issuance of an aggregate of
4,000,000 Series B Preferred Shares of the Company to Brenda Taylor  (1,000,000)
and Messrs.  Taylor  (1,000,000),  Winder  (1,000,000) and DePalo (1,000,000) in
return  for  their  personal  guarantees  of  approximately  $3,000,000  of  the
Company's  Subordinated  Convertible  Debentures.  Each  share  of the  Series B
Preferred Stock is valued at $1.50 per share and convertible into 1.50 shares of
Common  Stock.  The  Series B  Preferred  Shares  are  payable  by a three  year
Promissory  Note  bearing  interest at the rate of 7% per annum,  with  interest
accruing,  but not payable until the securities  are sold. The Promissory  Notes
are immediately  extended for additional  one-year terms. The Series B Preferred
Shares are fully paid and non-assessable. The Promissory Notes are non-recourse,
but are collateralized by a Pledge of the Stock.

         These Series B Preferred Shares are subject to a three (3) year vesting
period  pursuant  to which 1/3 of the shares vest  immediately,  and on July 23,
1997  an  additional  1/3  of  the  shares  vested  on  July  23,  1998,  if the
aforementioned  individuals are still employed by, or a director of, the Company
at such time. On July 23, 1996, the Company  reserved  500,000 common shares for
issuance upon the conversion of these Series B Preferred Shares.

         On  November  7,  1996,   at  the  Annual   Meeting  of   Shareholders,
stockholders of record on October 11, 1996, voting in person and by proxy, voted
to approve  "Proposal No. 2" described in the Company's Notice of Annual Meeting
and Proxy  Statement,  dated October 17, 1996, which ratified this action by the
Board of  Directors.  139,435  votes were cast against this Proposal and 425,496
votes were cast for this Proposal.

         The other two matters voted on at this annual  meeting of  shareholders
was  "Proposal  No. 1" with  respect to the election of  directors,  pursuant to
which,  of the 992,960 votes  entitled to be cast at the meeting,  the number of
votes listed next to the name of each  director were cast in favor of his or her
election:

         Taylor            773,438                   DePalo            773,413

         Winder            773,271                   Gurian            773,468

         B. Taylor         773,271                   Tabankin          773,438

In addition,  "Proposal  No. 3,"  relating to the  approval of the  selection of
accountants  for  fiscal  year  1997 was  approved  by  774,621  votes  for such
ratification and 4,522 votes against.

ITEM 5. OTHER INFORMATION

        The  Company has  consummated  a  "Settlement  &  Separation  Agreement"
severing  its  agency  relationships  with  NYNEX  Mobile  Communications,  Inc.
("NYNEX") and Bell Atlantic Mobile  Communications,  Inc. ("Bell Atlantic") with
respect to the  solicitation  of cellular  activations.  This was the  Company's
largest source of commission  and other income over the past twelve  months.  As
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES

part  of  this  arrangement,  the  Company  agreed  to  settle  its  claims  for
commissions due for the fixed sum of $95,000, net of NYNEX's and Bell Atlantic's
agreement to waive certain payables by the Company. In addition,  as part of the
Settlement  and  Separation  Agreement,  Bell  Atlantic and NYNEX have agreed to
release  the  Company  from  the   restrictions  of  certain   solicitation  and
non-competition  provisions  contained in the Company's  Agency  Agreements with
NYNEX and Bell Atlantic, respectively, which provisions would have precluded the
Company from soliciting  prior customers and from engaging in  solicitations  of
activations  for  Personal  Communications  Services  ("PCS")  in the  New  York
Metropolitan  Area.  The Company  continues to believe that PCS is the future of
wireless   communications.   The  Company  has  already   entered  into  various
preliminary  agreements  with  respect to  soliciting  activations  for PCS, and
cellular  activations  on behalf of  OmniPoint  and AT&T  (directly  or  through
various  agents)  in  the  New  York  Metropolitan  Area.  By  virtue  of  these
arrangements,  the Company  believes that in the next several  months it will be
able to replace  most or all of its prior  commission  income  derived  from its
NYNEX and Bell Atlantic Agency Agreements.  During this period, the Company will
continue to experience  cash flow  shortfalls.  Neither the  OmniPoint,  nor the
indirect  AT&T  arrangements,  preclude the Company  from other PCS  activities,
including  activation  solicitations for others.  Accordingly,  the Company will
continue  its efforts to build out and  operate its own PCS system,  pursuant to
its  recently  acquired  FCC  PCS  Licenses,  and  to  operate  and  expand  its
proprietary paging system, in which capacities the Company acts, or will act, as
an FCC licensed carrier.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<PAGE>
                ELECTRONICS COMMUNICATIONS CORP. AND SUBSIDIARIES


                                   SIGNATURES




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

DATED:     August 12, 1997

                                                ELECTRONICS COMMUNICATIONS CORP.



                                                By: /s/ William S. Taylor
                                                    ----------------------------
                                                    William S. Taylor, President