NEW YORK, Feb. 18, 2016 /PRNewswire/ -- Elephant Talk
Communications Corp. (NYSE MKT: ETAK) ("ET" or the "Company"), a
provider of cloud-based mobile network solutions today announced
the signing of a binding letter agreement (the "Agreement") with
Cross River Initiatives LLC ("Cross
River") to divest ValidSoft for a total consideration of
$12.5 million.
Hal Turner, Executive Chairman of
the Board of ET, commented, "We are pleased to have reached a
binding agreement with Cross River
for the divestiture of ValidSoft. The closing of this transaction
will significantly strengthen our balance sheet and provide working
capital to complete our restructuring and pursue key growth
opportunities. We see tremendous opportunity in ValidSoft's secure
biometric technology and intend to commercialize it, going forward,
through the perpetual, royalty-free license that we expect to
retain as part of the transaction. We want to thank our loyal
shareholders for their patience and support during our
restructuring."
On January 19, 2016, a
$500,000 advance was paid to ET, by
Cross River, for their proposed
purchase of ValidSoft (structured as a loan ("Loan") if the
transaction did not proceed). As part of a binding letter agreement
signed February 17, 2016,
Cross River will wire transfer
$8 million to ET no later than
March 21, 2016, and will issue a
$4 million short-term secured note in
favor of ET for the balance of the purchase price. Cross River will use all possible efforts to
complete a second advance payment to ET of $1.5 million before February 29, 2016, which, if paid, will serve to
reduce the $8,000,000 cash payable,
due upon closing. Effective as of the date of the Agreement, the
existing Loan will be applied by ET towards to the purchase price
of ValidSoft and will be non-refundable in the event that the
ValidSoft sale transaction fails to close before 21 March 2016 (or at all) for reasons
attributable to Cross River's
failure to adhere to the terms of the Agreement, in which case such
cash will be rolled into ET's PIPE placement.
Effective 1 February 2016,
Cross River has agreed to assume
all actual working capital and general business expenses of
ValidSoft. Any and all working capital payments will be
non-refundable in the event that the Transaction fails to close
before 21 March 2016 (or at all) for
reasons attributable to Cross
River's failure to adhere to the terms of the binding letter
agreement, in which case such cash will likewise be rolled into
ET's PIPE placement. Additionally, ET, ValidSoft and Cross River agree that they will negotiate a
perpetual, royalty-free license to ValidSoft's Device Trust™
and User Authentication™ solutions, including in particular
a right to incorporate such technologies into ET's mobile
telecommunications-cloud platform - including the right to resell
such technologies through its platform.
As previously announced, the Company is undergoing a
restructuring of its operations to bring costs in line with current
revenues and these actions have involved significant headcount
reductions, executive management changes and new board
members. The Company has accepted the resignations of two
longstanding board members, Mr. Carl
Stevens and Mr. Francisco
Ros, who have both stepped down for personal reasons.
Mr. Turner commented, "Although the divestiture has taken a little
longer than we had initially anticipated, we are pleased with the
overall restructuring and we can see a clear path towards
sustainability and future profitable growth. We would like to
thank both Mr. Stevens and Dr. Ros for their longstanding service
as independent board members and wish them well in their future
endeavors."
About Elephant Talk Communications Corp.:
Elephant Talk Communications Corp. (NYSE MKT: ETAK) has developed a
proprietary software and telecoms platform to provide cloud-based
mobile network solutions to Communications Services Providers
(MNOs, MVNOs), Enterprise, Government/Education Organizations,
Application/Content and Retail Providers.
Elephant Talk was founded by experienced software and telecom
professionals to commercialize its pure software-based telecom
platform (long before Software Defined Networks (SDN) and network
function virtualization (NFV) were recognized concepts). The
Company deployed its first virtual network (MVNO) platform for a
major mobile carrier in 2008. Elephant Talk's turnkey mobile
services platform is capable of supporting millions of subscribers.
The new Executive Management team enhances the Company with a
wealth of experience in the telecoms, software and technology
sectors and has a proven track record in achieving rapid, financial
and commercial growth. Please visit www.elephanttalk.com for
more information.
About ValidSoft UK Ltd.:
ValidSoft, a subsidiary of Elephant Talk Communications Corp.,
secures transactions using personal authentication and device
assurance. We enable our customers to enhance their security while
improving their user experience, utilizing our multi-factor
authentication platform, Voice Biometric engine and Device Trust
technology, all of which may be used as 'stand-alone' or integrated
into multi-vendor solutions. ValidSoft serves multiple clients
across the financial services, government and enterprise sectors
and is the only company to have been granted four European Privacy
Seals, reflecting its commitment to strong data privacy.
Visit: www.validsoft.com.
Forward-Looking Statements:
Certain statements contained herein constitute "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. Such statements may include, without
limitation, statements with respect to Elephant Talk's plans and
objectives, projections, expectations and intentions (including,
without limitation, Elephant Talk's plans in regard to its
ValidSoft subsidiary). These forward-looking statements are based
on current expectations, estimates and projections about Elephant
Talk's industry, management's beliefs and certain assumptions made
by management. Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult
to predict. Because such statements involve risks and
uncertainties, the actual results and performance of Elephant Talk
may differ materially from the results expressed or implied by such
forward-looking statements. Given these uncertainties, readers are
cautioned not to place undue reliance on such forward-looking
statements. Unless otherwise required by law, Elephant Talk also
disclaims any obligation to update its view of any such risks or
uncertainties or to announce publicly the result of any revisions
to the forward-looking statements made here. Additional information
concerning certain risks and uncertainties that could cause actual
results to differ materially from those projected or suggested in
Elephant Talk's filings with the Securities and Exchange
Commission, copies of which are available from the SEC or may be
obtained upon request from Elephant Talk.
Investor Contact:
Capital Markets Group, LLC
Alan Sheinwald or Valter Pinto
PH: (914) 669-0222
valter@capmarketsgroup.com
www.CapMarketsGroup.com
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SOURCE Elephant Talk Communications Corp.