eLEC Sells Legacy CLEC Businesses to Focus on Opportunities With Its Proprietary VoIP Solution
CELEBRATION, FL – June 26, 2007 – eLEC Communications Corp. today announced that it has closed on the sale of its two CLEC subsidiaries, New Rochelle Telephone Corp. and Telecarrier Services, Inc., to subsidiaries of Cyber Digital, Inc. By divesting itself of its legacy public switched telephone network (PSTN) based assets, eLEC has transitioned itself to a pure Internet-based calling provider via its wholly owned subsidiary, VoX Communications Corp., which is located in Celebration, Florida.
Paul Riss, CEO of eLEC, stated, "This divestiture transaction is significant to us in several ways. By selling our CLEC subsidiaries, we are now only a facilities-based IP carrier, instead of a landline reseller, and we now use exclusively our own IP technology, instead of renting someone else's technology. We are pleased that we will be able to record a gain on the sale of the subsidiaries of approximately $1.5 million. In addition, as part of the transaction we sold 808,000 shares of our restricted stock at a price of $0.34 per share to Cyber Digital in exchange for its assumption of an additional $275,000 in debt that we were obligated to pay in full on February 8, 2008. By selling the subsidiaries and fully retiring a note due in 2008, we have increased the equity section of our balance sheet by approximately $1.8 million."
VoX's Chief Information Officer, Mark Richards, added, "We are very pleased to announce this sale, which has taken a long time to bring to fruition. This sale was always a significant step in our long-term strategic plan, as we eagerly transition out of the legacy PSTN businesses into the new age of facilities-based Web calling and IP services. We continue to be extremely confident in our strategic direction as VoX continues to emerge as a viable technology solution that our wholesale customers can rely on. We also are continuing to execute upon our strategic goal as a wholly IP-based company by selling our own products on our own technology, which furnish a global reach for our services. In addition, we are continuing to attract large opportunities and have high expectations that we will be able to meet or exceed our goals. We believe VoX will emerge as a leader and not a follower in the wholesale VoIP and IP services market and we remain very confident in our mission."
About VoX Communications Corp.
VoX is a wholly owned subsidiary of eLEC Communications Corp., which has received approval to change its name to Pervasip Corp. VoX provides an integrated suite of IP-based communications services and offers wholesale broadband voice, origination and termination services for cable operators, carriers, ISPs, CLECs, resellers and other wireless and wireline operators, as well as enhanced VoIP telephone service to the small business and residential marketplace. For more information, www.voxcorp.net and www.pervasip.com.
This press release contains statements (such as projections regarding future performance) that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to those detailed from time to time in the Company's filings with the Securities and Exchange Commission.
# # #For more information, please contact:
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Paul Riss eLEC Communications 914.682.0214 phriss@elec.net |