OKLAHOMA CITY, June 3, 2013 /PRNewswire/ -- Elephant Talk Communications Corp. (NYSE MKT: ETAK), a leading international provider of proprietary Software Defined Network Architecture (Software DNA™) 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 entered into a Securities Purchase Agreement with investors, led by a $3 million investment from Elephant Talk CEO Steven van der Velden and a $5 million investment from Crede CG III. Ltd., a wholly-owned subsidiary of Crede Capital Group, llc., and investors placed by Dawson James to purchase an additional $2.5 million for an aggregate $10.5 million of its securities in a registered direct offering.
Under the terms of the Securities Purchase Agreements, Elephant Talk will sell an aggregate of 14,000,000 shares of common stock at a price of $0.75 per share, one cent above the closing price of the Company's stock on May 31, 2013 and issue warrants to acquire 6,300,000 shares of common stock, with a per share exercise price of $0.975. The warrants will be immediately exercisable following their issuance and will expire on the fifth anniversary of the date of issuance. The closing of the funding is expected to take place on or about June 6, 2013, subject to the satisfaction of customary closing conditions.
Dawson James Securities, Inc. acted as the exclusive placement agent in connection with this offering."Management has been working hard to secure financing and is pleased with the $7.5 million financing we have arranged from investors," said Steven van der Velden, Chief Executive Officer of the Company. "In addition to investor funding and as a sign of my strong belief in the future growth of Elephant Talk, I am investing $3 million alongside the investors. The financing is an integral part of the Company's plan to regain compliance with the NYSE MKT and we are looking forward to return the majority of our focus on growing the Company's Mobile and Security businesses." The Company intends to use the net proceeds from this offering for working capital and other general corporate purposes, including repayment of principal and interest payable under certain secured senior convertible notes the Company issued on March 29, 2012. The shares are being offered by Elephant Talk pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission. The public offering is being made by means of a prospectus and prospectus supplement. Copies of the prospectus and prospectus supplement relating to the offering may be obtained at the U.S. Securities and Exchange Commission's website, http://www.sec.gov, or via written request to Elephant Talk at 9705 N. Broadway Ext. Ste 200, 2nd Floor, Oklahoma City, OK 73114, Attn: Corporate Secretary, or by calling +(813) 926 - 8920. This press release does not and shall not constitute an offer to sell or the solicitation of any offer to buy any of the securities, nor shall there be any sale of the securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any state.
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