UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 12b-25
NOTIFICATION OF LATE FILING
0-23532
(Commission File Number)
(Check one): Form 10-K [_] Form 20-F [_] Form 11-K [_] Form 10-Q [X]
Form 10-D [_] Form N-SAR [_] Form N-CSR [_]
For Period Ended: SEPTEMBER 30, 2006
[_] Transition Report on Form 10-K
[_] Transition Report on Form 20-F
[_] Transition Report on Form 11-K
[_] Transition Report on Form 10-Q
[_] Transition Report on Form N-SAR
For the Transition Period Ended:
NOTHING IN THIS FORM SHALL BE CONSTRUED TO IMPLY THAT THE COMMISSION HAS
VERIFIED ANY INFORMATION CONTAINED HEREIN.
If the notification relates to a portion of the filing checked above, identify
the Item(s) to which the notification relates:
PART I -- REGISTRANT INFORMATION
GLOBETEL COMMUNICATIONS CORP.
Full Name of Registrant
Former Name if Applicable: N/A
9050 Pines Blvd., Suite 255
Address of Principal Executive Office (Street and Number)
Pembroke Pines, FL 33024
City, State and Zip Code
PART II -- RULES 12b-25(b) AND (c)
If the subject report could not be filed without unreasonable effort or expense
and the registrant seeks relief pursuant to Rule 12b-25(b), the following should
be completed. (Check box if appropriate)
(a) The reason described in reasonable detail in Part III of this form
could not be eliminated without unreasonable effort or expense;
(b) The subject annual report, semi-annual report, transition report on
Form 10-K, Form 20-F, Form 11-K, Form N-SAR or Form N-CSR, or portion
[X] thereof, will be filed on or before the fifteenth calendar day
following the prescribed due date; or the subject quarterly report or
transition report on Form 10-Q or subject distribution report on Form
10-D, or portion thereof, will be filed on or before the fifth calendar
day following the prescribed due date; and
(c) The accountant's statement or other exhibit required by Rule 12b-25(c)
has been attached if applicable.
PART III -- NARRATIVE
State below in reasonable detail why Forms 10-K, 20-F, 11-K, 10-Q, 10-D, N-SAR,
N-CSR, or the transition report or portion thereof, could not be filed within
the prescribed time period.
On October 6, 2006 the Company announced that the Securities and Exchange
Commission issued a formal order of investigation concerning among other things
certain accounting issues regarding the Company. In accordance with the
Company's established corporate governance procedures, the Board of Directors
has referred this matter to its Audit Committee (the "Audit Committee"). The
Audit Committee has commenced an investigation and will determine what action,
if any, the Company will take.
No conclusions have been reached by the Audit Committee to date, and the Company
cannot predict whether the results of the investigation will have any impact on
its financial results for the quarter and nine-month period ended September 30,
2006 or for any other period. As a result of the ongoing investigation, the
Company will not be able to file its Quarterly Report on Form 10-Q for the
quarter ended September 30, 2006 by the required filing date.
The Company will seek to resolve these issues as quickly as practicable and
plans to file its Form 10-Q as soon as possible following the completion of the
investigation.
PART IV-- OTHER INFORMATION
(1) Name and telephone number of person to contact in regard to this
notification
Jonathan Leinwand 954 241-0590
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(Name) (Area Code) (Telephone Number)
(2) Have all other periodic reports required under Section 13 or 15(d) of the
Securities Exchange Act of 1934 or Section 30 of the Investment Company Act of
1940 during the preceding 12 months or for such shorter period that the
registrant was required to file such report(s) been filed? If answer is no,
identify report(s). [X] Yes [_] No
(3) Is it anticipated that any significant change in results of operations from
the corresponding period for the last fiscal year will be reflected by the
earnings statements to be included in the subject report or portion thereof?
[X] Yes [_] No
If so, attach an explanation of the anticipated change, both narratively and
quantitatively, and, if appropriate, state the reasons why a reasonable estimate
of the results cannot be made.
As previously disclosed in a press release dated October 6, 2006, the Company's
Audit Committee has initiated an investigation into the accounting and financial
reporting of certain business transactions that occurred in 2004 and 2005. In
connection therewith, the Board engaged an independent, nationally recognized
law firm to conduct an investigation to determine whether or not the
documentation and analyses is sufficient to support the initial recording of the
transactions and, whether or not the applicable and consistent accounting
treatment for the two separate and unrelated transactions known as Sanswire and
Hotzone, occurred.
If it is determined that the initial accounting treatment was correct, then no
prior restatement of the previously reported financial statements would be
necessary, If is determined that either one or both of the transactions were
incorrectly capitalized as "Intangible assets", the applicable prior reporting
period(s) would require restatement. In addition, if it is determined that the
assets were recorded properly, then the adequacy of the documentation, the
procedures applied and the analyses performed in order to carry those assets at
their original cost, must be then reviewed to determine whether or not
management correctly concluded that there were no assets impairments prior to
and including this period.
If management correctly evaluated whether or not the asset impairment rules were
complied with, then the final investigation phase will be the determination as
to if and when any impairments occurred, in which management did not record
adjustments to the carrying amount of the Intangible Assets.
The Intangible assets in question represent $2.8 and $7.2 million dollars that
were recorded during the quarters ending June 30, 2004 and December 31, 2005
respectively.
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GLOBETEL COMMUNICAITONS CORP.
(Name of Registrant as Specified in Charter)
has caused this notification to be signed on its behalf by the undersigned
hereunto duly authorized.
Date: November 14, 2006
By: /s/ Jesus Quintero
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JESUS QUINTERO
Vice President,
Finance and Principal
Accounting Officer