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Registered Direct Offering of $12.0 Million Completed by Elephant Talk Communications (ETAK)

Scottsdale 6/19/2013 08:00 PM GMT (LinkMyStock)

QualityStocks would like to highlight Elephant Talk Communications Corp. (NYSE: ETAK). The company is a leading international provider of proprietary mobile Software DNA™ platforms for the telecommunications industry. Their technology empower Mobile Network Operators (MNOs), 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.

In the company’s news,

Elephant Talk Communications Corp. announced the completion of a registered direct public offering of an aggregate $12.0 million, which was led by a $4.5 million investment from company CEO Steven van der Velden, 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 to purchase an additional $2.5 million. The company sold an aggregate of 17,425,638 shares of common stock, par value $0.00001 per share, and warrants for purchasing up to an aggregate of 7,841,537 shares of common stock.

The shares are being sold to non-affiliate investors at $0.682 per share and to the affiliated investor (van der Velden) at $0.70 per share. The warrants have an initial exercise price of $0.887 per warrant share for both the affiliated investor and the non-affiliated investors. NYSE MKT notified Elephant Talk Communications on June 13 of its acceptance of the company’s plan of compliance; this was one of the closing conditions of the offering.

The gross proceeds realized by Elephant Talk Communications in connection with the offering are $12.0 million, and the net proceeds are anticipated to be around $11.4 million after deducting the placement agent and estimated offering expenses. A portion of the net proceeds from the offering will be used by Elephant Talk Communications to pay all outstanding obligations of around $6.7 million, pursuant to certain purchase agreements with the holders of certain senior secured convertible notes that the company issued on March 29, 2012. The remaining net proceeds will be used for working capital and other general corporate purposes.

Following this successful closing of the registered public offering, Elephant Talk Communications’ management plans to focus on growing the company’s topline while diligently moving Elephant Talk Communications toward being consistently operational cash flow-positive.

“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,” CEO and Chairman van der Velden said. “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.”

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Forward-Looking Statement:

This release may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Risks and uncertainties applicable to the company and its business could cause the company's actual results to differ materially from those indicated in any forward-looking statements.

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