OKLAHOMA CITY, — Elephant Talk Communications Corp. (nyse mkt:ETAK), a leading international provider of proprietary Software Defined Network Architecture (Software DNA(TM)) platforms for the telecommunications industry that empower Mobile (Virtual) Network Operators (MNOs and MVNOs) and a market leader in providing solutions to counter electronic fraud in the cloud, announced today that it has completed a registered direct public offering (the “Offering”) of an aggregate of $12.0 million, led by a $4.5 million investment from Elephant Talk CEO Steven van der Velden (the “Affiliated Investor”), and a $5.0 million investment from Crede CG III. Ltd., a wholly-owned subsidiary of Crede Capital Group, llc., and investors placed by Dawson James Securities, Inc. to purchase an additional $2.5 million. Elephant Talk sold an aggregate of 17,425,638 shares (the “Shares”) of the Company’s common stock, par value $.00001 per share (the “Common Stock”), and warrants (the “Warrants”) to purchase up to an aggregate of 7,841,537 shares of Common Stock (the “Warrant Shares”). The Shares are being sold at a price of $0.682 per share to non-affiliate investors and at a price of $0.70 per share to the Affiliated Investor. The Warrants have an initial exercise price of $0.887 per Warrant Share for both the Affiliated Investor and the non-affiliate investors. On June 13, 2013, NYSE MKT notified the Company of its acceptance of the Company’s Plan of Compliance, which was one of the closing conditions of the Offering.
The gross proceeds realized by the Company in connection with the Offering are $12.0 million and the net proceeds, after deducting the placement agent and estimated offering expenses, are expected to be approximately $11.4 million. The Company will use a portion of the net proceeds from this offering to pay all outstanding obligations of approximately $6.7 million pursuant to certain Purchase Agreements with the holders of certain senior secured convertible notes the Company issued on March 29, 2012. The Company will use the remaining net proceeds for working capital and other general corporate purposes.
“With the registered public offering successfully closed, management plans to focus their efforts on growing the Company’s top-line while diligently moving the Company towards being operational cash flow positive on a consistent basis,” stated Steven van der Velden, Chairman and CEO Elephant Talk Communications. “I believe that the recent fund raisings were an integral component of the NYSE MKT’s decision to accept the Company’s plan to regain compliance. Using the proceeds to repay existing debt strengthens the Company’s financial position by providing liquidity and significantly lowering the Company’s outstanding debt. In addition, the Company’s recent milestones of nearly reaching a positive cash flow position in March and receiving an additional $1.5 million of funding in May provide very positive momentum moving forward.”
About Elephant Talk
Elephant Talk Communications Corp. (nyse mkt:ETAK), is a leading international provider of mobile proprietary Software Defined Network Architecture (Software DNA(TM)) platforms for the telecommunications industry that empower Mobile Network Operators (MNOs) and Mobile Virtual Network Operators (MVNOs), Enablers (MVNEs) and Aggregators (MVNAs) with a full suite of applications, Full OSS/BSS Systems, Delivery Platforms, Support and Managed Services, on-site, cloud, hybrid and S/PaaS solutions, including Network, Mobile Internet ID Solutions, Secure Remote Access Management, Loyalty Management and Transaction Processing Services, superior Industry Expertise and high quality Customer Service without substantial upfront investment. Elephant Talk counts several of the world’s leading Mobile Operators amongst its customers including Vodafone, T-Mobile and Zain, and virtually all business is focused on tier 1 and tier 2 operators worldwide. Visit: www.elephanttalk.com.
ValidSoft Limited has been a wholly owned subsidiary of Elephant Talk Communications since early 2010 and underpins its mobile/cloud security offering. The company is a market leader in providing solutions to counter electronic fraud and safeguarding consumer privacy relating to a variety of bank, card, internet and telephone channels. ValidSoft’s solutions are used to verify the authenticity of both parties to a transaction (Mutual Authentication), the security of the relevant telecommunication channel used (Secure Communications), and the integrity of transactions itself (Transaction Verification) for the mass market, in a highly cost effective and secure manner while being very easy to use. The company counts several leading worldwide service providers and institutions amongst its customers. ValidSoft is the only security software company in the world that has been granted three European Privacy Seals. Visit: www.validsoft.com.
Steve Gersten Elephant Talk Communications
+1 813 926 8920
The Blueshirt Group
+1 415 489 2184
Public Relations Contacts:
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+ 1 212 459 6232
UK: Fishburn Hedges
+44 (0)20 7839 4321